Large Diameter Welded Pipe from Canada, China, Greece ...usitc.gov/publications/701_731/pub4768.pdf · Part II: Conditions of competition in the U.S. market ... Greece of LDWP that

U.S. International Trade CommissionPublication 4768 March 2018

Washington, DC 20436

Large Diameter Welded Pipe from Canada, China, Greece, India,

Korea, and Turkey

Investigation Nos. 701-TA-593-596 and 731-TA-1401-1406 (Preliminary)

U.S. International Trade Commission

COMMISSIONERS

Rhonda K. Schmidtlein, Chairman David S. Johanson, Vice Chairman

Irving A. Williamson Meredith M. Broadbent

Catherine DeFilippo

Staff assigned

Address all communications to Secretary to the Commission

United States International Trade Commission Washington, DC 20436

Director of Operations

Abu B. Kanu, Investigator Gregory LaRocca, Industry Analyst

Aimee Larsen, Economist Joanna Lo, Accountant

Lita David-Harris, Statistician Carolyn Holmes, Statistical Assistant

Michael Haldenstein, Attorney Henry Smith, Attorney

Douglas Corkran, Supervisory Investigator

Special assistance fromJulie Duffy

Bronwen Schriml

U.S. International Trade CommissionWashington, DC 20436

www.usitc.gov

Publication 4768 March 2018

Large Diameter Welded Pipe from Canada, China, Greece, India,

Korea, and Turkey


CONTENTS Page

i

Determinations………………………………………………………………………………………………………………………..1

Views of the Commission………………………………………………………………………………………………………...3

Part I: Introduction .............................................................................................................. I-1

Background ................................................................................................................................ I-1

Statutory criteria and organization of the report ..................................................................... I-2

Statutory criteria ................................................................................................................... I-2

Organization of report ........................................................................................................... I-3

Market summary ....................................................................................................................... I-3

Summary data and data sources ............................................................................................... I-4

Previous and related investigations .......................................................................................... I-4

Nature and extent of alleged subsidies and sales at LTFV ........................................................ I-6

Alleged subsidies ................................................................................................................... I-6

Alleged sales at LTFV ........................................................................................................... I-11

The subject merchandise ........................................................................................................ I-12

Commerce’s scope .............................................................................................................. I-12

Tariff treatment ................................................................................................................... I-13

The product ............................................................................................................................. I-13

Description and applications ............................................................................................... I-13

Manufacturing processes .................................................................................................... I-18

Domestic like product issues ................................................................................................... I-24

Part II: Conditions of competition in the U.S. market........................................................... II-1

U.S. market characteristics....................................................................................................... II-1

Channels of distribution ........................................................................................................... II-1

Geographic distribution ........................................................................................................... II-2

Supply and demand considerations ......................................................................................... II-3

U.S. supply ............................................................................................................................ II-3

U.S. demand ......................................................................................................................... II-7

CONTENTS Page

ii

Part II: Conditions of competition in the U.S. market….……………………………………………Continued

Substitutability issues ............................................................................................................. II-12

Lead times .......................................................................................................................... II-12

Factors affecting purchasing decisions............................................................................... II-12

Comparison of U.S.-produced and imported LDWP .......................................................... II-14

Part III: U.S. producers’ production, shipments, and employment ...................................... III-1

U.S. producers ......................................................................................................................... III-1

U.S. production, capacity, and capacity utilization ................................................................. III-3

Alternative products ............................................................................................................ III-4

U.S. producers’ U.S. shipments and exports ........................................................................... III-5

U.S. producers’ inventories ..................................................................................................... III-6

U.S. producers’ imports and purchases .................................................................................. III-6

U.S. employment, wages, and productivity ............................................................................ III-6

Part IV: U.S. imports, apparent U.S. consumption, and market shares ............................... IV-1

U.S. importers.......................................................................................................................... IV-1

U.S. imports ............................................................................................................................. IV-1

Negligibility .............................................................................................................................. IV-5

Cumulation considerations ..................................................................................................... IV-6

Fungibility ............................................................................................................................ IV-7

Geographical markets ......................................................................................................... IV-7

Presence in the market ....................................................................................................... IV-7

U.S. market shares ................................................................................................................ IV-13

Part V: Pricing data ............................................................................................................. V-1

Factors affecting prices ............................................................................................................ V-1

Raw material costs ............................................................................................................... V-1

U.S. inland transportation costs ........................................................................................... V-1

Pricing practices ....................................................................................................................... V-2

Pricing methods .................................................................................................................... V-2

CONTENTS Page

iii

Part V: Pricing data... ............................................................................................. ..Continued

Sales terms and discounts .................................................................................................... V-3

Price data .................................................................................................................................. V-3

Price trends ........................................................................................................................... V-8

Price comparisons .............................................................................................................. V-10

Lost sales and lost revenue .................................................................................................... V-11

Part VI: Financial experience of U.S. producers .................................................................. VI-1

Background .............................................................................................................................. VI-1

Operations on LDWP ............................................................................................................... VI-2

Net sales quantity and revenue .......................................................................................... VI-8

COGS and expenses ............................................................................................................. VI-9

Profitability ........................................................................................................................ VI-10

Capital expenditures and research and development expenses .......................................... VI-11

Assets and return on Assets .................................................................................................. VI-12

Capital and investment ......................................................................................................... VI-13

Part VII: Threat considerations and information on nonsubject countries .......................... VII-1

The industry in Canada ........................................................................................................... VII-3

Changes in operations ........................................................................................................ VII-3

Operations on LDWP .......................................................................................................... VII-3

Alternative products ........................................................................................................... VII-4

Exports ................................................................................................................................ VII-4

The industry in China .............................................................................................................. VII-6

Exports .................................................................................................................................... VII-6

The industry in Greece ........................................................................................................... VII-8

Changes in operations ........................................................................................................ VII-8

Operations on LDWP .......................................................................................................... VII-9

Alternative products ........................................................................................................... VII-9

Exports ................................................................................................................................ VII-9

CONTENTS Page

iv

Part VII: Threat considerations and information on nonsubject countries………………..Continued

The industry in India ............................................................................................................. VII-12

Changes in operations ...................................................................................................... VII-12

Operations on LDWP ........................................................................................................ VII-12

Alternative products ......................................................................................................... VII-12

Exports .............................................................................................................................. VII-13

The industry in Korea ........................................................................................................... VII-15




Exports .............................................................................................................................. VII-16

The industry in Turkey .......................................................................................................... VII-18




Exports .............................................................................................................................. VII-19

U.S. inventories of imported merchandise .......................................................................... VII-21

Subject countries combined ................................................................................................. VII-21

U.S. importers’ outstanding orders ...................................................................................... VII-22

Information on nonsubject countries .................................................................................. VII-22

Appendixes

A. Federal Register notices ................................................................................................. A-1

B. List of staff conference witnesses .................................................................................. B-1

C. Summary data ................................................................................................................ C-1

D. Shipments of LDWP by grade, size, and method of manufacturing .............................. D-1

E. Line pipe and structural pipe .......................................................................................... E-1

Note— Information that would reveal confidential operations of individual concerns may not be published and therefore has been deleted. Such deletions are indicated by asterisks. ***.

UNITED STATES INTERNATIONAL TRADE COMMISSION


Large Diameter Welded Pipe from Canada, China, Greece, India, Korea, and Turkey

DETERMINATIONS1

On the basis of the record2 developed in the subject investigations, the United States International Trade Commission (“Commission”) determines, pursuant to the Tariff Act of 1930 (“the Act”), that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of large diameter welded pipe (LDWP) from Canada, China, India, Korea, and Turkey, provided for in statistical reporting numbers 7305.11.10, 7305.11.1060, 7305.11.50, 7305.12.10, 7305.12.10, 7305.12.50, 7305.19.10, 7305.19.10, 7305.19.50, 7305.31.40, 7305.31.60, 7305.39.10, and 7305.39.50 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value (“LTFV”) and to be subsidized by the governments of China, India, Korea, and Turkey. The Commission also determines, pursuant to the Act, that there is a reasonable indication that an industry in the United States is threatened with material injury by reason of imports from Greece of LDWP that are alleged to be sold in the United States at less than fair value (“LTFV”). COMMENCEMENT OF FINAL PHASE INVESTIGATIONS

Pursuant to section 207.18 of the Commission’s rules, the Commission also gives notice of the commencement of the final phase of its investigations. The Commission will issue a final phase notice of scheduling, which will be published in the Federal Register as provided in section 207.21 of the Commission’s rules, upon notice from the U.S. Department of Commerce (“Commerce”) of affirmative preliminary determinations in the investigations under sections 703(b) or 733(b) of the Act, or, if the preliminary determinations are negative, upon notice of affirmative final determinations in those investigations under sections 705(a) or 735(a) of the Act. Parties that filed entries of appearance in the preliminary phase of the investigations need not enter a separate appearance for the final phase of the investigations. Industrial users, and, if the merchandise under investigation is sold at the retail level, representative consumer organizations have the right to appear as parties in Commission antidumping and countervailing duty investigations. The Secretary will prepare a public service list containing the names and addresses of all persons, or their representatives, who are parties to the investigations.

1 Due to the Federal government weather-related closure on March 2, 2018, these investigations

conducted under authority of Title VII of the Tariff Act of 1930 have been tolled by one day pursuant to 19 U.S.C. §§ 1671b(a)(2), 1673b(a)(2).

2 The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR 207.2(f)).

BACKGROUND

On January 17, 2018, American Cast Iron Pipe Company, Birmingham, Alabama; Berg Steel Pipe Corp., Panama City, Florida; Berg Spiral Pipe Corp., Mobile, Alabama; Dura-Bond Industries, Inc., Export, Pennsylvania; Skyline Steel, Newington, Virginia; and Stupp Corporation, Baton Rouge, Louisiana filed a petition with the Commission and Commerce, alleging that an industry in the United States is materially injured or threatened with material injury by reason of subsidized imports of LDWP from China, India, Korea, and Turkey and LTFV imports of LDWP from Canada, China, Greece, India, Korea, and Turkey. Accordingly, effective January 17, 2018, the Commission, pursuant to sections 703(a) and 733(a) of the Act (19 U.S.C. 1671b(a) and 1673b(a)), instituted countervailing duty investigation Nos. 701-TA-593-596 and antidumping duty investigation Nos. 731-TA-1401-1406 (Preliminary).

Notice of the institution of the Commission’s investigations and of a public conference to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register of January 23, 2018 (83 FR 3187). The conference was held in Washington, DC, on February 7, 2018, and all persons who requested the opportunity were permitted to appear in person or by counsel.

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Views of the Commission

Based on the record in the preliminary phase of these investigations, we determine that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of large diameter welded pipe (“LDWP”) from Canada, China, India, Korea, and Turkey that are allegedly sold in the United States at less than fair value and that are allegedly subsidized by the governments of China, India, Korea, and Turkey. We further determine that there is a reasonable indication that an industry in the United States is threatened with material injury by reason of imports of LDWP from Greece that are allegedly sold in the United States at less than fair value.1

I. The Legal Standard for Preliminary Determinations

The legal standard for preliminary antidumping and countervailing duty determinations requires the Commission to determine, based upon the information available at the time of the preliminary determinations, whether there is a reasonable indication that a domestic industry is materially injured or threatened with material injury, or that the establishment of an industry is materially retarded, by reason of the allegedly unfairly traded imports.2 In applying this standard, the Commission weighs the evidence before it and determines whether “(1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final investigation.”3

II. Background

The petitions in these investigations were filed on January 17, 2018 by eight domestic producers of LDWP: American Cast Iron Pipe Company; Berg Steel Pipe Corp./Berg Spiral Pipe Corp.; Dura-Bond Industries; Skyline Steel; Stupp Corporation; Greens Bayou Pipe Mill, LP; JSW Steel (USA) Inc.; and Trinity Products LLC (collectively, “petitioners”). Petitioners submitted a joint postconference brief and witnesses from each of the petitioners appeared at the staff conference. Five sets of respondents appeared at the conference and/or submitted postconference briefs: Evraz Inc. NA, (“Evraz”) a producer and exporter of the subject merchandise in Canada; Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret T.A.S., producers and exporters of the subject merchandise in Turkey, and Borusan

1 As a result of the closure of the Federal government on March 2, 2018, due to inclement weather, these investigations have been tolled by one day pursuant to 19 U.S.C. §§ 1671b(a)(2), 1673b(a)(2).

2 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785 F.2d 994, 1001-04 (Fed. Cir. 1986); Aristech Chem. Corp. v. United States, 20 CIT 353, 354-55 (1996). No party argues that the establishment of an industry in the United States is materially retarded by the allegedly unfairly traded imports.

3 American Lamb Co., 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d 1535, 1543 (Fed. Cir. 1994).

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Mannesmann Pipe U.S., Inc. an importer of the subject merchandise (collectively, "Borusan"); Corinth Pipeworks Pipe Industry S.A., a producer and exporter of the subject merchandise in Greece and CPW America Co., an importer (collectively,“Corinth”); Welspun Tubular LLC, a domestic producer, Welspun Corp. Limited, a producer and exporter in India, and importers Welspun Tradings Limited and Welspun Global Trade LLC (collectively “Welspun”); Erciyas Celik Boru Sanayi A.S., Emek Boru Makina Sanayi ve Ticaret, A.S., Umran Celik Boru Sanayii A.S., Ozbal Celik Boru Sanayi ticaret ve Taahhut A.S., producers and exporters of the subject merchandise in Turkey, the Istanbul Minerals and Metals Exporters Association (“IMMIB”) and its members, and the Turkish Steel Exporters’ Association (Çelik İhracatçıları Birliği, referred to as “ÇİB”) and its members (collectively, the “Turkish Producers and Exporters”). In addition, SeAH Steel Corporation, (“SeAH”) a producer and exporter of the subject merchandise in Korea and two purchasers of LDWP, Cheniere Energy, Inc. (“Cheniere”) and Plains All American Pipeline (“Plains”) filed nonparty statements.

U.S. industry data are based on the questionnaire responses of eleven producers, accounting for the vast majority of U.S. production of LDWP during the period of investigation (“POI”).4 U.S. import data are based on official Commerce import statistics. The Commission received questionnaire responses from 22 U.S. importers, accounting for *** percent of subject imports from Canada, *** percent of subject imports from China, *** percent of subject imports from Greece, *** percent of subject imports from India, *** percent of subject imports from Korea, *** percent of subject imports from Turkey, and *** percent of imports from nonsubject countries.5 The Commission received responses to its foreign producer questionnaire from one firm in Canada, no firms in China, one firm in Greece, one firm in India, one firm in Korea, and six firms in Turkey. These firms’ exports to the United States accounted for approximately *** percent of exports to the United States from Canada, *** percent from Greece, *** percent from India, *** percent from Korea, and *** percent from Turkey.6

III. Domestic Like Product

In determining whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of the subject merchandise, the Commission first defines the “domestic like product” and the “industry.”7 Section 771(4)(A) of the Tariff Act of 1930, as amended (“the Tariff Act”), defines the relevant domestic industry as the “producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major

4 Confidential Report (“CR”)/Public Report (“PR”) at I-4; CR/PR at III-1. 5 CR at I-5, PR at I-4; CR/PR at IV-1. As indicated in the Staff Report, the official import statistics

include U.S. import data under the following HTS statistical reporting numbers: 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000.

6 CR at I-5, VII-3, VII-9, VII-11, VII-17, VII-21, and VII-26, PR at I-4, VII-3, VII-6, VII-8, VII-12, VII-15, VII-18.

7 19 U.S.C. § 1677(4)(A).

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proportion of the total domestic production of the product.”8 In turn, the Tariff Act defines “domestic like product” as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation.”9

The decision regarding the appropriate domestic like product(s) in an investigation is a factual determination, and the Commission has applied the statutory standard of “like” or “most similar in characteristics and uses” on a case-by-case basis.10 No single factor is dispositive, and the Commission may consider other factors it deems relevant based on the facts of a particular investigation.11 The Commission looks for clear dividing lines among possible like products and disregards minor variations.12 Although the Commission must accept Commerce’s determination as to the scope of the imported merchandise that is subsidized and/or sold at less than fair value,13 the Commission determines what domestic product is like the imported articles Commerce has identified.14 The Commission may, where appropriate, include domestic articles in the domestic like product in addition to those described in the scope.15

8 19 U.S.C. § 1677(4)(A). 9 19 U.S.C. § 1677(10). 10 See, e.g., Cleo Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v.

Department of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United States, 19 CIT 450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (“every like product determination ‘must be made on the particular record at issue’ and the ‘unique facts of each case’”). The Commission generally considers a number of factors including the following: (1) physical characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) customer and producer perceptions of the products; (5) common manufacturing facilities, production processes, and production employees; and, where appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996).

11 See, e.g., S. Rep. No. 96-249 at 90-91 (1979). 12 See, e.g., Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49; see also S. Rep. No. 96-249

at 90-91 (Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as to permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent consideration of an industry adversely affected by the imports under consideration.”).

13 See, e.g., USEC, Inc. v. United States, 34 Fed. App’x 725, 730 (Fed. Cir. 2002) (“The ITC may not modify the class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States, 688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989).

14 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission may find a single like product corresponding to several different classes or kinds defined by Commerce); Cleo, 501 F.3d at 1298 n.1 (“Commerce’s {scope} finding does not control the Commission’s {like product} determination.”); Torrington, 747 F. Supp. at 748-52 (affirming the Commission’s determination defining six like products in investigations where Commerce found five classes or kinds).

15 See, e.g., Pure Magnesium from China and Israel, Inv. Nos. 701-TA-403 and 731-TA-895-96 (Final), USITC Pub. 3467 at 8 n.34 (Nov. 2001); Torrington, 747 F. Supp. at 748-49 (holding that the (Continued…)

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A. Scope Definition

In its notices of initiation, Commerce defined the imported merchandise within the scope of these investigations as:

welded carbon and alloy steel pipe, more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may be used to transport oil, gas, slurry, steam, or other fluids, liquids, or gases. It may also be used for structural purposes, including, but not limited to, piling. Specifically, not included is large diameter welded pipe produced only to specifications of the American Water Works Association (AWWA) for water and sewage pipe. Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Large diameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of these investigations, whether or not produced according to a particular standard. Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the in-scope large diameter welded pipe. Excluded from the scope are any products covered by the existing antidumping duty orders on welded line pipe from the Republic of Korea, welded line pipe from the Republic of Turkey, and welded ASTM A–312 stainless steel pipe from Korea, as well as any products covered by the existing countervailing duty order on welded line pipe from Turkey. See Welded Line Pipe from the Republic of Korea and the Republic of Turkey: Antidumping Duty Orders, 80 FR 75056 (December 1, 2015); Welded ASTM A–312 Stainless Steel Pipe from South Korea: Antidumping Duty

(…Continued) Commission is not legally required to limit the domestic like product to the product advocated by the petitioner, co-extensive with the scope).

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Order, 57 FR 62300 (December 30, 1992); and Welded Line Pipe from the Republic of Turkey: Countervailing Duty Order, 80 FR 75054 (December 1, 2015).16

LDWP is a long carbon or alloy steel tubular product produced in sizes from over 16 inches to 80 inches in outside diameter (O.D.). It is typically produced to American Petroleum Institute (“API”) standards as line pipe or American Society for Testing and Materials (“ASTM”) standards as structural pipe.17 In general, line pipe products are used for the distribution of oil and gas, generally in a pipeline or utility distribution system. Structural pipe is used as support or for load-bearing purposes. Structural applications include piling, structural supports, sign poles, bollards, columns, and fencing.18

B. Arguments of the Parties

Petitioners’ Arguments. Petitioners argue that there is a single domestic like product that is coextensive with the scope of these investigations. Petitioners maintain that all LDWP shares certain physical characteristics in that all LDWP within the scope is tubular and made of steel. They assert that steel chemistries exist along a continuum, depending upon the grade of the steel used, with no clear demarcations among the different specifications to which LDWP is produced.19 Petitioners reject respondents’ asserted distinctions between line pipe and structural pipe and between line pipe over 24 inches O.D. and line pipe 24 inches and under O.D.20

Respondents’ Arguments. Several respondents raise arguments concerning the definition of the domestic like product. Borusan, Corinth, and Evraz argue that line pipe and structural pipe should be defined to be separate domestic like products because they have different physical characteristics and uses, lack interchangeability, are sold at different prices, and are considered different products by producers and purchasers.21 Relying primarily on differences in manufacturing processes, Evraz argues that line pipe 16 to 24 inches in diameter

16 Large Diameter Welded Pipe From Canada, Greece, India, the People’s Republic of China, the

Republic of Korea, and the Republic of Turkey: Initiation of Less-Than-Fair-Value Investigations, 83 FR 7154, 7161 (Feb. 20, 2018); Large Diameter Welded Pipe From India, the People’s Republic of China, the Republic of Korea, and the Republic of Turkey: Initiation of Countervailing Duty Investigations, 83 FR 7148, 7153 (Feb. 20, 2018). Commerce also noted that “{t}he large diameter welded pipe that is subject to these investigations is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive.” Id.

17 CR at I-20- to I-21, PR at I-17 to I-18. 18 CR at I-13 to I-15, PR at I-15. 19 Petitioners’ Postconference Brief at 7. 20 Petitioners’ Postconference Brief at 3-7. 21 Borusan’s Postconference Brief at 2-10; Corinth’s Postconference Brief at 6-12; Evraz’

Postconference Brief at 40-46.

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and line pipe over 24 inches in diameter are separate domestic like products. Finally, nonparty SeAH maintains that stainless LDWP should be defined to be a separate domestic like product.22

C. Analysis

Based on the current record, we define a single domestic like product consisting of all LDWP coextensive with the scope of the investigations for purposes of the preliminary phase of these investigations.

1. Line Pipe vs. Structural Pipe Physical Characteristics and Uses. All line pipe and structural pipe within the scope of

investigation are tubular products produced from carbon and alloy steel. However, line pipe and structural pipe are produced from different grades of steel to different specifications.23 Line pipe is produced to API 5L specifications, which are standards for pipe designed for conveying gas, water, and oil. API specifications indicate the strength of the steel, process of manufacture, product specification levels, heat treatment, and test pressure.24 Line pipe above 30 inches in diameter is often produced to additional more stringent specifications provided by the customer.25 Structural pipe, in contrast, is produced to ASTM specifications, such as A53, A252, or A500.26 Line pipe can bear multiple stencils that indicate conformance with API as well as less restrictive ASTM standards.27 Corinth indicates that line pipe and structural pipe also have different finishes. Line pipe receives an epoxy coating designed to last longer than the paint or varnish on structural pipe.28

With respect to uses of line pipe and structural pipe, the record indicates that line pipe is used to convey liquids such as oil and gas while structural pipe is used for support in construction projects and as piling.29 Petitioners assert that, in addition to some line pipe being downgraded and sold for structural uses, line pipe may be deliberately produced to API standards for structural uses. For instance, they claim that line pipe produced to API standards is required for certain bridge pilings.30

Manufacturing Facilities, Production Processes, and Employees. The record on this factor is mixed. Both line and structural pipe are produced by the same manufacturing processes: electric resistance welding (“ERW”), helical (or spiral) submerged arc welding (“HSAW”), and longitudinal welding (“LSAW”).31 Although each domestic producer tends to

22 See SeAH’s Statement at 6. 23 Evraz’s Postconference Brief at 41-42. 24 CR at I-19, PR at I-17. 25 Conf. Tr. at 144 (Harapiak). 26 CR at I-21, PR at I-18. 27 CR at I-20 n.40, PR at I-17 n.40. 28 Corinth’s Postconference Brief at 7-8. 29 CR at I-19 to I-20, PR at I-16 to I-18. 30 Petitioners’ Postconference Brief, Exhibit 1 at 15. 31 CR at I-22, PR at I-18.

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focus on producing either line pipe or structural pipe, there is some overlap in production facilities; four U.S. producers manufactured line pipe and structural pipe in the same facilities.32 The record also indicates that production of line pipe requires additional steps such as hydrostatic testing and X-ray examination of the weld in order to detect any defects, and that additional finishing lines are required for production of line pipe produced to API standards.33

Channels of Distribution. Both structural pipe and line pipe are generally sold to end users for specific projects.34

Interchangeability. Line pipe produced to API standards can sometimes be used for structural applications but structural pipe cannot be used for conveyance of oil and gas.35

Producer and Customer Perceptions. The record is limited concerning this factor. Because of the distinct nature of pipeline and construction projects, line pipe and structural pipe generally are purchased by different customers. The record suggests that structural pipe and line pipe are perceived differently by customers based upon their different specifications and intended uses.36

Price. The Commission collected pricing data on two structural pipe products (products 4 and 5) and four line pipe products (products 1, 2, 3, and 6).37 Prices appear slightly higher for line pipe than structural pipe due to the more expensive steel, and additional testing for line pipe.38

Conclusion. The information in the current record indicates that there is at least a colorable argument that there is a clear dividing line between line pipe and structural pipe within the scope. There appear to be distinctions between line pipe and structural pipe in terms of their physical characteristics and uses, customer/producer perceptions, and pricing. Interchangeability appears to be limited to one way as line pipe can be used for structural applications, but structural pipe cannot be used in place of line pipe for the conveyance of oil and gas. By contrast, there are similarities for line pipe and structural pipe in the production processes, facilities, and employees, and the channels of distribution.

Given the limited record, we define a single domestic like product including line pipe and structural pipe for purposes of the preliminary phase of the investigations. However, we

32 Petitioners’ Postconference Brief at 7-8. 33 CR at I-28, PR at I-23. See Conf. Tr. at 104 (Kaplan) (all line pipe welds are x-rayed); Conf. Tr. at

78 (de Mey) (Skyline would need to add “finishing lines” to start producing API line pipe). 34 CR/PR at II-1, E-4 and Table II-1. 35 Petitioners’ Postconference Brief at 6-7. Some structural pipe manufactured in the United

States is pipe originally produced to API standards for oil or gas applications that did not satisfy the applicable requirements, and was downgraded. Id.

36 Petitioners’ Postconference Brief at 7 (“Customers have somewhat different perceptions of the various LDWP products, depending upon the intended use and the standard, if any, to which they are manufactured.”); Bosuran’s Postconference Brief at 9-10; Corinth’s Postconference Brief at 10.

37 See CR at V-5, PR at V-3. 38 Compare CR/PR at Figs V-1, V-2, V-3 and V-7 (products 1, 2, 3, and 6) with CR/PR at Figs. V-4

and V-5 (products 4 and 5); Petitioners’ Postconference Brief at 8. For pricing products of comparable size (i.e. pricing products 4 and 6), the line pipe product is priced higher. See CR at Figs. V-5 and V-7.

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intend to seek further information regarding distinctions between line pipe and structural pipe and examine the issue further in any final phase investigations.39

1. Line Pipe 16-24 Inches O.D. and Over 24 Inches O.D.

Physical Characteristics and Uses. Line pipe 16 to 24 inches O.D. shares the same general physical characteristics and uses as line pipe over 24 inches O.D. Line pipe in both size ranges are produced to API standards and are used for conveyance of oil, gas, and other liquids.40 Line pipe 16 to 24 inches O.D. is now more commonly used in natural gas and oil gathering systems.41 Evraz asserts that line pipe over 24 inches O.D. often is a custom product that is produced to particular customers’ specifications in addition to the API standards

Manufacturing Facilities, Production Processes, and Employees. The primary distinction between line pipe 16-24 inches O.D. and line pipe over 24 inches O.D. is the manufacturing process. ERW is the predominant manufacturing process for the production of line pipe 16-24 inches O.D.42 Line pipe over 24 inches O.D. is typically produced by submerged arc welding.43 Because of the helical wrap of the steel, HSAW pipe size is not limited by the coil width and is generally used for larger diameter pipe in the United States. ERW is limited by the coil width and is accordingly suitable for thinner walled and smaller diameter pipe.44 ERW and HSAW manufacturing methods use steel coils while the LSAW method produces line pipe from cut-to-length steel plates.45 The finishing and testing stages are similar in the ERW, LSAW, and HSAW manufacturing methods.46 Evraz submits that the weld on line pipe over 24 inches O.D. is produced by HSAW or LSAW processes and is stronger and more reliable than the weld produced by ERW.47 However, purchasers do not specify which manufacturing process is required when asking producers to bid on a project.48

While ERW is usually used to produce line pipe less than 24 inches O.D., HSAW and LSAW are also used to produce line pipe less than 24 inches O.D.49 As petitioners note, *** U.S. producers make *** using the ERW method, and *** make the pricing product using LSAW and

39 Parties should provide specific information in their draft questionnaire comments in any final

phase investigations regarding any proposed domestic like product definition to allow the Commission to collect appropriate data for its analysis. See 19 C.F.R. § 207.63(b).

40 Evraz’s Postconference Brief at 46-47. 41 CR at I-17, PR at I-15 to I-16. 42 CR at I-24, PR at I-19. 43 CR at I-23 to I-24, PR at I-21 to I-22. 44 CR at I-24, PR at I-19; CR/PR at Table I-1. 45 CR at I-27, PR at I-22. 46 CR at I-28, PR at I-23. 47 Evraz’s Postconference Brief at 47-48. 48 Conf. Tr. at 82 (Clark). 49 See CR at D-22 (2.7 percent of domestic producers’ shipments consist of line pipe 16-24 inches

in diameter produced by HSAW or LSAW).

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*** produces the product with the HSAW method. With respect to *** producers use the LSAW process.50

Channels of Distribution. While the channels of distribution through which both groups of products are sold are generally similar according to petitioners, Evraz maintains that line pipe 16 to 24 inches O.D. is more frequently sold to distributors than line pipe over 24 inches O.D.51

Interchangeability. Line pipe of different diameters is generally not interchangeable. However, this is true whether the O.D. is 16 to 24 inches or over 24 inches.

Producer and Customer Perceptions. It is unclear to what extent purchasers view line pipe 16 to 24 inches O.D. as a different product from line pipe over 24 inches O.D.

Price. Pricing data indicate that line pipe 16 to 24 inches O.D. is priced comparably to line pipe over 24 inches O.D. at approximately $1000 per short ton.52

Conclusion. The record is somewhat limited regarding similarities or distinctions between line pipe 16 to 24 inches O.D. and line pipe over 24 inches O.D. Line pipe 16 to 24 inches O.D. shares the same general physical characteristics and end uses as line pipe over 24 inches O.D., and all line pipe within the scope of the investigations is priced similarly. The primary distinctions concerning line pipe 16 to 24 inches O.D. from that over 24 inches O.D. appear to be differences in manufacturing facilities, processes, and employees. While there also may be limited interchangeability between line pipe of different sizes, this is not inconsistent with a finding of one domestic like product for products along a continuum of product sizes.53 The limited record regarding producer and customer perceptions and channels of distribution is mixed and inconclusive. Given this record, we do not define line pipe 16 to 24 inches O.D. and line pipe over 24 inches O.D. as separate domestic like products.

Accordingly, for the above reasons, we define a single domestic like product consisting of all LDWP coextensive with the scope for purposes of these preliminary phase investigations.54

50 Petitioners’ Postconference Brief at 4. 51 Petitioners’ Postconference Brief at 5; Evraz’s Postconference Brief at 49. 52 Compare CR at Figs V-1, V-2, and V-3 (products 1, 2, and 3) with CR at Fig. V-7 (product 6). 53 See, e.g., High Pressure Steel Cylinders from China, Inv. No. 701-TA-480 and 731-TA-1188

(Preliminary) USITC Pub. 4241 (July 2011) at 9-10; Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey, Inv. Nos. 731-TA-1099-1101 (Preliminary), USITC Pub. 3832 (January 2006) at 10.

54 Nonparty SeAH asserts that stainless LDWP should be defined as a separate domestic like product. It reports that it produces subject stainless LDWP in Korea and indicates that it is not aware of any domestic production of stainless LDWP. See SeAH’s Statement at 6. Petitioners clarified their intention to include stainless products within the scope of the investigations only after the Commission had issued questionnaires in the preliminary phase of the investigations and thus specific information on stainless steel products was not collected. See Letter from T. Brightbill to W. Ross and L. Barton (January 26, 2018) at 5 (“The scope does not exclude stainless steel LDWP.”). In any final phase investigations, if Commerce includes stainless LDWP in the scope, we urge the parties to provide specific information concerning stainless LDWP in their comments on the draft questionnaires.

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IV. Domestic Industry

The domestic industry is defined as the domestic “producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major proportion of the total domestic production of the product.”55 In defining the domestic industry, the Commission’s general practice has been to include in the industry producers of all domestic production of the like product, whether toll-produced, captively consumed, or sold in the domestic merchant market.

We must determine whether any producer of the domestic like product should be excluded from the domestic industry pursuant to Section 771(4)(B) of the Tariff Act. This provision allows the Commission, if appropriate circumstances exist, to exclude from the domestic industry producers that are related to an exporter or importer of subject merchandise or which are themselves importers.56 Exclusion of such a producer is within the Commission’s discretion based upon the facts presented in each investigation.57

As explained below, three domestic producers – Evraz Oregon Steel Tubular (“Evraz Oregon”), Skyline Steel LLC (“Skyline”), and Welspun Tubular LLC (“Welspun Tubular”) – meet the statutory definition of a related party because they are related to an exporter or import subject merchandise. The parties opposed the exclusion of any domestic producers as related parties.58 We find that appropriate circumstances do not exist to exclude any of the related

55 19 U.S.C. § 1677(4)(A). 56 See Torrington Co. v. United States, 790 F. Supp. 1161, 1168 (Ct. Int’l Trade 1992), aff’d

without opinion, 991 F.2d 809 (Fed. Cir. 1993); Sandvik AB v. United States, 721 F. Supp. 1322, 1331-32 (Ct. Int’l Trade 1989), aff’d mem., 904 F.2d 46 (Fed. Cir. 1990); Empire Plow Co. v. United States, 675 F. Supp. 1348, 1352 (Ct. Int’l Trade 1987).

57 The primary factors the Commission has examined in deciding whether appropriate circumstances exist to exclude a related party include the following:

(1) the percentage of domestic production attributable to the importing producer; (2) the reason the U.S. producer has decided to import the product subject to investigation

(whether the firm benefits from the LTFV sales or subsidies or whether the firm must import in order to enable it to continue production and compete in the U.S. market);

(3) whether inclusion or exclusion of the related party will skew the data for the rest of the industry;

(4) the ratio of import shipments to U.S. production for the imported product; and (5) whether the primary interest of the importing producer lies in domestic production or

importation. Changzhou Trina Solar Energy Co. v. USITC, 100 F. Supp.3d 1314, 1326-31 (Ct. Int’l. Trade 2015); see also Torrington Co. v. United States, 790 F. Supp. at 1168.

58 Petitioners states that no producer should be excluded and that the domestic industry should therefore be defined as all domestic producers of LDWP. See Petitioners’ Postconference Brief at 8. Welspun argues that Welspun Tubular should be included in the domestic industry because it accounted for a sizable share of domestic production and only imported subject merchandise for two projects. For one project, it indicated that ***. For the other project, Welspun explained that it could not afford to purchase the necessary input from Korea to produce the line pipe domestically when the imported input became subject to antidumping duties. Welspun’s Postconference Brief at 14-16.

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party producers from the domestic industry for purposes of the preliminary phase of these investigations.

Evraz Oregon. Evraz Oregon was the *** largest domestic producer in 2015, but it ceased U.S. production in 2016.59 It is a related party because of its relationship with producers and exporters of the subject merchandise in Canada.60

We recognize that imports of LDWP by ***.61 However, Evraz Oregon attributed its decision to cease domestic production in 2016 in part to the effects of unfairly traded imports.62 Moreover, Evraz Oregon has indicated that it would restart the Oregon facility given appropriate market conditions.63 It also does not appear to have benefited from the importation of subject merchandise.64 Evraz Oregon ***.65 On balance, and in the absence of argument to the contrary, we find that appropriate circumstances do not exist to exclude Evraz Oregon as a related party, but we plan to reconsider its inclusion in any final phase investigations.

Skyline. Skyline was the *** largest domestic producer in 2017, accounting for *** percent of domestic production.66 It is a related party because it imported LDWP during the POI.67 Skyline stated that it was ***.68

The ***. There is no indication that it benefited from its *** volume of subject imports to any significant degree.69 Also, it *** and no party has argued that Skyline be excluded from the definition of the domestic industry.70 Accordingly, we find that appropriate circumstances do not exist to exclude Skyline from the domestic industry.

59 U.S. Producers’ Questionnaires at II-3a. In April 2016, Evraz Oregon idled its only U.S. LDWP

facility in Portland, Oregon. CR at VI-2, PR at VI-1. 60 ***. *** at I-4, CR/PR at Table III-2. See 19 U.S.C. § 1677(4)(B)(ii)(III). 61 *** by Evraz Oregon’s related affiliates were *** short tons in 2015 (the equivalent of ***

percent of Evraz Oregon’s domestic production), *** short tons in 2016 (the equivalent of *** percent of Evraz Oregon’s domestic production), and *** short tons in 2017. CR/PR at Table III-8. Evraz Oregon explained that its affiliates imported because of “geographical proximity of our Canadian mills to some U.S. projects that are a greater distance from our Portland mill.” Id. See also Conf. Tr. at 166 (Kristofic) (projects located closer to Canadian facilities).

62 Conf. Tr. at 165-66 (Kristofic). 63 CR at VI-2, PR at VI-1. 64 Evraz Oregon’s operating income to net sales ratio was ***. See ***; CR/PR at Table VI-3.

Evraz Oregon’s capital expenditures *** in 2017. See ***. 65 ***. 66 CR/PR at Table III-1. 67 Skyline imported *** short tons of LDWP from China in 2015 (the equivalent of *** percent of

its domestic production), *** short tons of LDWP from China in 2016 (the equivalent of *** percent of its domestic production), and *** short tons of LDWP from China and Turkey in 2017 (the equivalent of *** percent of its domestic production). CR/PR at Table III-8.

68 CR/PR at Table III-11. 68 CR/PR at Table III-1. 69 Skyline’s operating income to net sales ratio was *** the industry average during each year of

the POI. See ***; CR/PR at Table VI-3. 70 CR/PR at Table III-1.

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Welspun Tubular. Welspun Tubular was the *** largest domestic producer in 2017, accounting for *** percent of domestic production.71 It is related party because it is *** and it imported LDWP during the POI.72

Welspun Tubular’s imports relative to its domestic production in 2015 and 2016 suggest that its principal interest lay in domestic production of LDWP.73 However, in 2017, Welspun Tubular imported substantially increased volumes of subject imports for two projects. Welspun explained that it imported because it did not produce LDWP for the two projects in the United States.74 It is not apparent that Welspun Tubular’s domestic production operations benefited from its importations of the subject merchandise.75 While it ***, no party has argued that Welspun Tubular be excluded from the definition of the domestic industry.76 On balance and taking into account its relatively substantial U.S. production operations and the lack of argument to the contrary, we find appropriate circumstances do not exist to exclude Welspun Tubular from the domestic industry as a related party for purposes of these preliminary determinations, but we plan to reconsider its inclusion in any final phase investigations.

V. Negligible Imports

Pursuant to Section 771(24) of the Tariff Act, imports from a subject country of merchandise corresponding to a domestic like product that account for less than three percent (four percent in the case of a developing country in a countervailing duty investigation) of all such merchandise imported into the United States during the most recent 12 months for which data are available preceding the filing of the petition shall be deemed negligible.77

Additionally, even if subject imports are found to be negligible for purposes of present material injury, they shall not be treated as negligible for purposes of a threat analysis should the Commission determine that there is a potential that subject imports from the country concerned will imminently account for more than three percent of all such merchandise imported into the United States.78 In the case of countervailing duty investigations involving developing countries (as designated by the United States Trade Representative), the statute

71 CR/PR at Table III-1. 72 19 U.S.C. § 1677(4)(B)(i) & 19 U.S.C. § 1677(4)(B)(ii)(II). Welspun Tubular imported *** short

tons of LDWP from India in 2015 (the equivalent of *** percent of its domestic production), *** short tons of LDWP from India in 2016 (the equivalent of *** percent of its domestic production), and *** short tons of LDWP from India in 2017 (the equivalent of *** percent of its domestic production). CR/PR at Table III-8.

73 See CR/PR at Table III-8. Welspun Tubular’s capital expenditures ***. See CR/PR at Table VI-4. 74 ***. Welspun’s Postconference Brief at 14-16. 75 Welspun Tubular’s operating income to net sales ratio was ***. See CR/PR at Table VI-3. 76 ***. 77 19 U.S.C. §§ 1671b(a), 1673b(a), 1677(24)(A)(i), 1677(24)(B); see also 15 C.F.R. § 2013.1

(developing countries for purposes of 19 U.S.C. § 1677(36)). 78 19 U.S.C. § 1677(24)(A)(iv).

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indicates that the negligibility limits are four percent and nine percent, rather than three percent and seven percent.79

A. Arguments of the Parties

Petitioners. Petitioners contend that the Commission should not terminate any of the current investigations on the basis of negligibility. They assert that subject imports from Greece were 4.08 percent of total imports of LDWP for the period December 2016 - November 2017, the period for which petitioners had data when they filed their petitions on January 17, 2018.80

Respondents. Corinth contends that subject imports from Greece were 1.3 percent of total imports of LDWP during January-December 2017, well below the 3 percent threshold and negligible for purposes of the Commission’s determination of present material injury.81 Corinth additionally maintains that subject imports from Greece are unlikely to imminently exceed the 3 percent threshold. It argues that subject imports from Greece fluctuated widely during 2017, reflecting the project-based nature of sales of large diameter welded line pipe in the U.S. market. Although Corinth acknowledges that it reported arranged subject imports for 2018, it asserts that the vast majority of the 2018 imports are for products that the U.S. industry cannot produce and were contracted for prior to the filing of the petitions.82

B. Analysis

We examine whether subject imports from any of the subject countries are negligible. Imports from five of the subject countries are above the pertinent negligibility thresholds. For the 12-month period preceding the filing of the petition, as a percentage of total imports in the antidumping investigations, subject imports from Canada were 18.1 percent, subject imports from China were 3.6 percent, subject imports from India were 40.7 percent, subject imports from Korea were 10.8 percent, and subject imports from Turkey were 6.5 percent.83 As a percentage of total imports in the countervailing duty investigations, subject imports from China were 3.3 percent, subject imports from India were 37.0 percent, subject imports from Korea were 19.0 percent, and subject imports from Turkey were 5.9 percent.84

However, subject imports of LDWP from Greece accounted for 1.4 percent as a share of total imports in the antidumping investigations for the applicable 12-month period prior to filing of the petition. This level is well below the 3 percent negligibility threshold for purposes

79 19 U.S.C. § 1677(24)(B). 80 Petitioners’ Postconference Brief at 9. The most recent 12-month period that precedes the

filing of the petition pursuant to statute is January-December 2017. 19 U.S.C. § 1677(24)(A)(i); CR at IV-6, PR at IV-5.

81 Corinth’s Postconference Brief at 13-14. 82 Corinth’s Postconference Brief at 14. 83 CR/PR at Table IV-2. 84 CR/PR at Table IV-2.

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of present material injury analysis.85 We therefore find that subject imports from Greece are below the negligibility thresholds for present material injury in the antidumping investigation.86

We also find that there is not a likelihood that evidence leading to a contrary result will arise in any final phase investigations. The import data used in our analysis are based on official import statistics for the applicable 12-month period and a large upward adjustment to the data for the volume of subject imports from Greece is unlikely.87 Accordingly, we find it unlikely the Commission will receive any additional or contrary information in the final phase of these investigations affecting the quantity of subject imports from Greece such that they would be non-negligible for purposes of material injury analysis.

On the other hand, we find that subject imports from Greece are likely to exceed the 3 percent negligibility threshold in the imminent future, making them eligible for purposes of determining threat of material injury. Under the statute, even if subject imports are found to be negligible for purposes of present material injury, they are not negligible for purposes of a threat analysis if there is a potential that subject imports will imminently exceed the negligibility threshold.

We observe that the ***.88 Specifically, for the first six months of 2018, it has ordered *** short tons of LDWP from Greece and a total of *** short tons of LDWP for 2018.89 This quantity of subject imports from Greece indicates that the volume of subject imports during 2018 *** to that during 2015 (201,344 short tons) and *** 2016 (90,802 short tons) rather than the 13,854 short tons that entered during 2017.90 During 2015 and 2016, subject imports from Greece accounted for 15.0 percent and 12.2 percent, respectively, of total imports of LDWP, levels far exceeding the 3 percent negligibility threshold.91

Given the likely level of subject imports from Greece during 2018, we determine that there is the potential that subject imports from Greece will imminently exceed the 3 percent threshold. We therefore consider subject imports from Greece for purposes of determining a reasonable indication of threat of material injury.

VI. Cumulation

For purposes of evaluating the volume and effects for a determination of reasonable indication of material injury by reason of subject imports, section 771(7)(G)(i) of the Tariff Act

85 CR/PR at Table IV-2. 86 There is no countervailing duty investigation with respect to Greece. 87 See CR/PR at Table IV-2. 88 CR at VIII-35, PR at VII-22. 89 CPW America Co. reports that it has ordered delivery of *** short tons for the first quarter of

2018, *** short tons for the second quarter, *** short tons for the third quarter, and *** short tons for the fourth quarter. CR at VIII-35, PR at VII-22. We also note that consistent with the importer’s orders, the sole exporter of LDWP in Greece projected exports of *** short tons of LDWP to the United States in 2018. CR/PR at Table VII-9.

90 CR/PR at Table IV-2. 91 Corinth, the only subject producer and exporter in Greece, also reported excess capacity of

*** short tons in 2017. CR/PR at Table VII-9. Corinth reported that ***. CR at II-7, PR at II-5; ***.

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requires the Commission to cumulate subject imports from all countries as to which petitions were filed and/or investigations self-initiated by Commerce on the same day, if such imports compete with each other and with the domestic like product in the U.S. market. In assessing whether subject imports compete with each other and with the domestic like product, the Commission generally has considered four factors:

(1) the degree of fungibility between subject imports from different countries and between subject imports and the domestic like product, including consideration of specific customer requirements and other quality related questions;

(2) the presence of sales or offers to sell in the same geographic markets of subject imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject imports from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.92

While no single factor is necessarily determinative, and the list of factors is not exclusive, these factors are intended to provide the Commission with a framework for determining whether the subject imports compete with each other and with the domestic like product.93 Only a “reasonable overlap” of competition is required.94

As discussed above, we have found that subject imports from Greece are negligible for purposes of our consideration of whether there is a reasonable indication of material injury. Therefore, these imports are ineligible for cumulation for purposes of our material injury analysis.95 Allegedly dumped imports from Canada, China, India, Korea, and Turkey and allegedly subsidized imports from China, India, Korea, and Turkey remain eligible for cumulation because petitioners filed petitions with respect to all such subject imports on the same day, January 17, 2018. As explained below, we find a reasonable overlap of competition between the domestic like product and those imports from each subject country eligible for cumulation and between those imports from each such subject country.

92 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-278-280 (Final), USITC Pub. 1845 (May 1986), aff’d, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int’l Trade), aff’d, 859 F.2d 915 (Fed. Cir. 1988).

93 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989). 94 The Statement of Administrative Action (SAA) to the Uruguay Round Agreements Act (URAA),

expressly states that “the new section will not affect current Commission practice under which the statutory requirement is satisfied if there is a reasonable overlap of competition.” H.R. Rep. No. 103-316, Vol. I at 848 (1994) (citing Fundicao Tupy, 678 F. Supp. at 902); see Goss Graphic Sys., Inc. v. United States, 33 F. Supp. 2d 1082, 1087 (Ct. Int’l Trade 1998) (“cumulation does not require two products to be highly fungible”); Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping markets are not required.”).

95 19 U.S.C. § 1677(24)(A)(iv).

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A. Arguments of the Parties

Petitioners’ Arguments. Petitioners argue that there is a reasonable overlap of competition because subject imports compete directly with each other and with the domestic like product. Petitioners note that LDWP imported into the United States, regardless of source, is generally produced in accordance with API or ASTM standards. They assert that if the product satisfies the applicable specifications, it is interchangeable.96 Petitioners observe that subject imports were present in the Northeast and Central Southwest from *** subject country, and from ***. They further argue that subject imports and the domestic like product are primarily sold to end users. While they acknowledge that the project-based nature of competition means that import levels fluctuate from month to month, they assert that subject imports and the domestic product were imported or shipped during the vast majority of months of the POI.97

Respondents’ Arguments. Evraz asserts that subject imports from Canada compete differently than imports from other subject countries. Evraz claims that it targets projects that call for the highest quality, “custom made” specifications and that it is uniquely positioned to provide pipe for cross-border projects that run from Canada into the United States. Further, unlike other imports, which enter the U.S. market through the closest port to a given project, Evraz claims it cannot reach all U.S. projects without adding a substantial cost for inland freight.98 Evraz argues that, throughout the POI, its sales to one purchaser (***) were made pursuant to a *** and that it did not compete with any domestic producers or other importers for these sales.99

B. Analysis

Based on the record of the preliminary phase of these investigations, we find a reasonable overlap of competition among eligible subject imports from Canada, China, India, Korea, and Turkey and between subject imports from each source and the domestic like product.

Fungibility. There appears to be a high degree of substitutability between domestically produced LDWP and LDWP imported from subject sources.100 LDWP, regardless of source, is generally produced in accordance with API or ASTM standards.101 When comparing the domestic product to the subject imports from each country, at least half of responding U.S. producers and importers reported that the domestic product and imports from each subject source are "always" or “frequently” used interchangeably. 102 For comparisons between imports from subject sources, a majority of U.S. producers indicated that LDWP from each

96 Petitioners’ Postconference Brief at 10-11. 97 Petitioners’ Postconference Brief at 11-12. 98 Evraz’s Postconference Brief at 21-22. 99 Evraz’s Postconference Brief at 19-20. 100 See CR at II-16, PR at II-12. 101 CR at I-19, I-21, PR at I-17 to I-18. 102 See CR/PR at Table II-7.

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subject source is "always" used interchangeably.103 Importers’ responses were less definitive; in most of the comparisons of subject imports from different sources, a majority of importers reported that the products were “sometimes” interchangeable. In the remaining comparisons between imports from subject sources, a majority of importers reported that they were “always” or “frequently” used interchangeably.104 In no instances when comparing the domestic product or LDWP from subject sources did any U.S. producers or importers report that they were “never” interchangeable.105

In addition, most U.S. producers reported that there were “never” differences other than price between all country pairs, and most importers reported that there were “sometimes” or “never” differences other than price between subject imports and domestic LDWP.106

Evraz argues that because it focused on specialized products, subject imports from Canada lacked fungibility with imports from other subject countries and the domestic product.107 Information in the record, however, does not support Evraz’s contention that its shipments of LDWP differed from those of imports from other subject countries or the domestic like product. Domestic producers’ and importers’ responses with respect to interchangeability and non-price differences with respect to subject imports from Canada were comparable to their responses concerning the other subject countries.108 Shipment data indicate that *** of shipments of subject imports from Canada consisted of HSAW pipe with outside diameters that ranged from 24 to 48 inches or ERW pipe with diameters of 16 to 24 inches.109 The domestic producers’ and importers’ shipments from, China, India, Turkey and, to a lesser extent, Korea were also concentrated in these same product ranges.110 Moreover, subject imports from Canada were *** grades X60-69 and X70-79 steel, and the shipments of domestic product and subject imports from India, Korea, and Turkey also consisted of these steel grades.111 This demonstrates that, notwithstanding Evraz’s arguments to the contrary, there is a sufficient degree of fungibility among the subject imports and the domestic like product for purposes of finding a reasonable overlap of competition.

Channels of Distribution. Subject imports and the domestic like product shared the same general channels of distribution. During the period of investigation, domestic producers and importers of subject imports from Canada, China, and India were sold primarily to end

103 See CR/PR at Table II-7. 104 See CR/PR at Table II-7. 105 See CR/PR Table II-7. In comparisons between nonsubject imports and the domestic product

or subject imports, a minority of importers reported that they were “never” interchangeable. Id. 106 See CR/PR at Table II-8. 107 Evraz’s Postconference Brief at 19-20. 108 See CR/PR at Table II-7. 109 CR/PR at Table D-2. 110 See CR/PR at Table D-2 (China, ERW 16-24; India, HSAW 24-48; Korea, ERW 16-24; Turkey

HSAW 24-48). 111 See CR/PR at Table IV-4, Table D-1. The vast majority of the subject imports from Canada also

fall within the four line pipe pricing products categories. The four line pipe pricing products accounted for *** percent of shipments of subject imports from Canada. CR at V-5, PR at V-3.

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users.112 Subject imports from Korea and Turkey were sold to end users as well as distributors.113

Geographic Overlap. U.S. producers reported selling LDWP to all regions of the contiguous United States.114 Subject imports from all subject countries were sold in the Northeast and Central Southwest, and subject imports from all subject countries except Canada were present in the Southeast.115

Simultaneous Presence in Market. Subject imports from Canada, China, and Korea were present in the U.S. market in all 36 months of the POI, January 2015-December 2017.116 Subject imports from India were present in 27 of 36 months and subject imports from Turkey were present in 32 of 36 months.117

Conclusion. The record indicates that imports from the eligible subject countries are fungible with the domestic like product and with each other, that imports from each of the eligible subject countries and the domestic like product are sold in similar channels of distribution and similar geographic markets, and that subject imports and the domestic like product have been simultaneously present in the U.S. market. In light of the foregoing, we find that there is a reasonable overlap of competition between the domestic like product and imports from each subject country eligible for cumulation and between imports from each such subject country.

VII. Reasonable Indication of Material Injury by Reason of Subject Imports

A. Legal Standard

In the preliminary phase of antidumping and countervailing duty investigations, the Commission determines whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of the imports under investigation.118 In making this determination, the Commission must consider the volume of subject imports, their effect on prices for the domestic like product, and their impact on domestic producers of the domestic like product, but only in the context of U.S. production operations.119 The statute defines “material injury” as “harm which is not inconsequential,

112 See CR/PR at Table II-1. 113 See CR/PR at Table II-1. 114 CR/PR at Table II-2. 115 CR/PR at Table II-2. 116 CR/PR Table IV-7. 117 CR/PR at Table IV-7. 118 19 U.S.C. §§ 1671b(a), 1673b(a). The Trade Preferences Extension Act of 2015, Pub. L. 114-

27, amended the provisions of the Tariff Act pertaining to Commission determinations of reasonable indication of material injury and threat of material injury by reason of subject imports in certain respects. We have applied these amendments here.

119 19 U.S.C. § 1677(7)(B). The Commission “may consider such other economic factors as are relevant to the determination” but shall “identify each {such} factor ... {a}nd explain in full its relevance to the determination.” 19 U.S.C. § 1677(7)(B).

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immaterial, or unimportant.”120 In assessing whether there is a reasonable indication that the domestic industry is materially injured by reason of subject imports, we consider all relevant economic factors that bear on the state of the industry in the United States.121 No single factor is dispositive, and all relevant factors are considered “within the context of the business cycle and conditions of competition that are distinctive to the affected industry.”122

Although the statute requires the Commission to determine whether there is a reasonable indication that the domestic industry is “materially injured by reason of” unfairly traded imports,123 it does not define the phrase “by reason of,” indicating that this aspect of the injury analysis is left to the Commission’s reasonable exercise of its discretion.124 In identifying a causal link, if any, between subject imports and material injury to the domestic industry, the Commission examines the facts of record that relate to the significance of the volume and price effects of the subject imports and any impact of those imports on the condition of the domestic industry. This evaluation under the “by reason of” standard must ensure that subject imports are more than a minimal or tangential cause of injury and that there is a sufficient causal, not merely a temporal, nexus between subject imports and material injury.125

In many investigations, there are other economic factors at work, some or all of which may also be having adverse effects on the domestic industry. Such economic factors might include nonsubject imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or management decisions by domestic producers. The legislative history explains that the Commission must examine factors other than subject imports to ensure that it is not attributing injury from other factors to the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the statutory material injury threshold.126 In performing its examination, however, the Commission need not isolate

120 19 U.S.C. § 1677(7)(A). 121 19 U.S.C. § 1677(7)(C)(iii). 122 19 U.S.C. § 1677(7)(C)(iii). 123 19 U.S.C. §§ 1671b(a), 1673b(a). 124 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484-85 (Fed. Cir. 1998) (“{T}he statute

does not ‘compel the commissioners’ to employ {a particular methodology}.”), aff’g 944 F. Supp. 943, 951 (Ct. Int’l Trade 1996).

125 The Federal Circuit, in addressing the causation standard of the statute, has observed that “{a}s long as its effects are not merely incidental, tangential, or trivial, the foreign product sold at less than fair value meets the causation requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir. 2003). This was re-affirmed in Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008), in which the Federal Circuit, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997), stated that “this court requires evidence in the record ‘to show that the harm occurred “by reason of” the LTFV imports, not by reason of a minimal or tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States, 458 F.3d 1345, 1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001).

126 SAA, H.R. Rep. 103-316, Vol. I at 851-52 (1994) (“{T}he Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject imports.”); S. Rep. 96-(Continued…)

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the injury caused by other factors from injury caused by unfairly traded imports.127 Nor does the “by reason of” standard require that unfairly traded imports be the “principal” cause of injury or contemplate that injury from unfairly traded imports be weighed against other factors, such as nonsubject imports, which may be contributing to overall injury to an industry.128 It is clear that the existence of injury caused by other factors does not compel a negative determination.129

Assessment of whether material injury to the domestic industry is “by reason of” subject imports “does not require the Commission to address the causation issue in any particular way” as long as “the injury to the domestic industry can reasonably be attributed to the subject imports” and the Commission “ensure{s} that it is not attributing injury from other sources to the subject imports.”130 Indeed, the Federal Circuit has examined and affirmed various Commission methodologies and has disavowed “rigid adherence to a specific formula.”131 (…Continued) 249 at 75 (1979) (the Commission “will consider information which indicates that harm is caused by factors other than less-than-fair-value imports.”); H.R. Rep. 96-317 at 47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take into account evidence presented to it which demonstrates that the harm attributed by the petitioner to the subsidized or dumped imports is attributable to such other factors;” those factors include “the volume and prices of nonsubsidized imports or imports sold at fair value, contraction in demand or changes in patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at 877.

127 SAA at 851-52 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by unfair imports.”); Taiwan Semiconductor Industry Ass’n, 266 F.3d at 1345. (“{T}he Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... . Rather, the Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha de Chile AG v. United States, 180 F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not required to isolate the effects of subject imports from other factors contributing to injury” or make “bright-line distinctions” between the effects of subject imports and other causes.); see also Softwood Lumber from Canada, Inv. Nos. 701-TA-414 and 731-TA-928 (Remand), USITC Pub. 3658 at 100-01 (Dec. 2003) (Commission recognized that “{i}f an alleged other factor is found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’ then there is nothing to further examine regarding attribution to injury”), citing Gerald Metals, 132 F.3d at 722 (the statute “does not suggest that an importer of LTFV goods can escape countervailing duties by finding some tangential or minor cause unrelated to the LTFV goods that contributed to the harmful effects on domestic market prices.”).

128 S. Rep. 96-249 at 74-75; H.R. Rep. 96-317 at 47. 129 See Nippon, 345 F.3d at 1381 (“an affirmative material-injury determination under the

statute requires no more than a substantial-factor showing. That is, the ‘dumping’ need not be the sole or principal cause of injury.”).

130 Mittal Steel, 542 F.3d at 877-78; see also id. at 873 (“While the Commission may not enter an affirmative determination unless it finds that a domestic industry is materially injured ‘by reason of’ subject imports, the Commission is not required to follow a single methodology for making that determination ... {and has} broad discretion with respect to its choice of methodology.”) citing United (Continued…)

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The Federal Circuit’s decisions in Gerald Metals, Bratsk, and Mittal Steel all involved cases in which the relevant “other factor” was the presence in the market of significant volumes of price-competitive nonsubject imports. The Commission interpreted the Federal Circuit’s guidance in Bratsk as requiring it to apply a particular additional methodology following its finding of material injury in cases involving commodity products and a significant market presence of price-competitive nonsubject imports.132 The additional “replacement/benefit” test looked at whether nonsubject imports might have replaced subject imports without any benefit to the U.S. industry. The Commission applied that specific additional test in subsequent cases, including the Carbon and Certain Alloy Steel Wire Rod from Trinidad and Tobago determination that underlies the Mittal Steel litigation.

Mittal Steel clarifies that the Commission’s interpretation of Bratsk was too rigid and makes clear that the Federal Circuit does not require the Commission to apply an additional test nor any one specific methodology; instead, the court requires the Commission to have “evidence in the record ‘to show that the harm occurred ‘by reason of’ the LTFV imports,’” and requires that the Commission not attribute injury from nonsubject imports or other factors to subject imports.133 Accordingly, we do not consider ourselves required to apply the replacement/benefit test that was included in Commission opinions subsequent to Bratsk.

The progression of Gerald Metals, Bratsk, and Mittal Steel clarifies that, in cases involving commodity products where price-competitive nonsubject imports are a significant factor in the U.S. market, the Court will require the Commission to give full consideration, with adequate explanation, to non-attribution issues when it performs its causation analysis.134

The question of whether the material injury threshold for subject imports is satisfied notwithstanding any injury from other factors is factual, subject to review under the substantial

(…Continued) States Steel Group v. United States, 96 F.3d 1352, 1362 (Fed. Cir. 1996) and S. Rep. 96-249 at 75. In its decision in Swiff-Train v. United States, 793 F.3d 1355 (Fed. Cir. 2015), the Federal Circuit affirmed the Commission’s causation analysis as comporting with the Court’s guidance in Mittal.

131 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542 F.3d at 879 (“Bratsk did not read into the antidumping statute a Procrustean formula for determining whether a domestic injury was ‘by reason’ of subject imports.”).

132 Mittal Steel, 542 F.3d at 875-79. 133 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875-79 & n.2

(recognizing the Commission’s alternative interpretation of Bratsk as a reminder to conduct a non-attribution analysis).

134 To that end, after the Federal Circuit issued its decision in Bratsk, the Commission began to present published information or send out information requests in the final phase of investigations to producers in nonsubject countries that accounted for substantial shares of U.S. imports of subject merchandise (if, in fact, there were large nonsubject import suppliers). In order to provide a more complete record for the Commission’s causation analysis, these requests typically seek information on capacity, production, and shipments of the product under investigation in the major source countries that export to the United States. The Commission plans to continue utilizing published or requested information in the final phase of investigations in which there are substantial levels of nonsubject imports.

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evidence standard.135 Congress has delegated this factual finding to the Commission because of the agency’s institutional expertise in resolving injury issues.136

B. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis of whether there is a reasonable indication of material injury and threat of material injury by reason of subject imports.

1. Demand Conditions

End uses for LDWP include oil and gas transmission pipelines and construction projects such as marine or bridge foundations and sign pole structure.137 U.S. demand for line pipe reflects oil and gas drilling activity which depends on oil and gas prices.138 The nonresidential construction sector drives demand for LDWP used in structural applications.139

The rig count is a leading indicator of oil and gas construction activity.140 The rig count fell overall during the POI, generally declining during the first half of the POI before recovering somewhat in the second half.141 Spending on nonresidential construction is indicative of the level of investment in construction projects that use structural LDWP.142 Nonresidential construction spending increased modestly over the POI.143

Apparent U.S. consumption of LDWP decreased by 26.5 percent from 2015 to 2017.144 Apparent U.S. consumption of LDWP was 3.13 million short tons in 2015, 2.22 million short tons in 2016, and 2.23 million short tons in 2017.145 Most U.S. producers and importers reported that demand for LDWP decreased or fluctuated during the POI.146

135 We provide in our discussions below a full analysis of other factors alleged to have caused

any material injury experienced by the domestic industry. 136 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96

F.3d at 1357; S. Rep. 96-249 at 75 (“The determination of the ITC with respect to causation is ... complex and difficult, and is a matter for the judgment of the ITC.”).

137 CR at II-14, PR at II-11. 138 CR at II-10, II-14, PR at II-7, II-11. 139 CR at II-13, PR at II-10. 140 CR at II-11, PR at II-9. 141 CR/PR at Fig. II-2 142 CR at II-13, PR at II-10. 143 See CR/PR at Fig. II-3. 144 CR/PR at Tables IV-9, C-1. 145 CR/PR at Tables IV-9, C-1. 146 CR/PR at Table II-5.

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2. Supply Conditions

LDWP is typically made to order for pipeline and construction projects.147 Most LDWP is shipped directly to end users, but LDWP can also be first shipped to a distributor for a particular project.148 LDWP is not generally kept in inventory except when it is waiting to ship.149 Domestic producers and importers generally reported lead times averaging 78 to 118 days, respectively.150 Line pipe accounted for the vast majority of shipments of LDWP during the POI.151

The domestic industry had the largest share of the U.S. market during the POI. The domestic industry’s market share increased from 57.0 percent in 2015 to 66.5 percent in 2016 and then declined to 53.9 percent in 2017, for an overall decline of 3.1 percentage points.152

The domestic industry’s capacity declined 1.3 percent over the POI.153 Every domestic producer except *** reported a prolonged shutdown or curtailment.154 The most notable of the shutdowns were Stupp’s shuttering of an HSAW mill in 2016, and Evraz Oregon’s idling of its HSAW mill in April 2016.155 Three domestic producers, ***, reported expansions of their plants.156

Subject imports were the second largest source of supply to the U.S. market. Subject imports’ share of apparent U.S. consumption decreased from 32.6 percent in 2015 to 23.4 percent in 2016 and then increased to 38.2 percent in 2017.157 Subject imports, with LDWP imports from Greece excluded, decreased from 26.2 in 2015 to 19.3 percent in 2016 and then increased to 37.6 percent in 2017.158

Nonsubject imports were the third largest source of supply to the U.S. market during the POI. Nonsubject imports’ share of apparent U.S. consumption decreased from 10.4 percent in 2015 to 10.1 percent in 2016 and 7.9 percent in 2017.159

3. Substitutability and Other Conditions

Because LDWP is produced to API and ASTM standards, there is a high degree of substitutability between domestically produced LDWP and subject imports.160 Further, at least

147 CR at II-16, V-2, PR at II-12, V-2. 148 CR/PR at II-1; Conf. Tr. at 51 (Kaplan). 149 Conf. Tr. at 102-103 (Chefren, Griggs, Clark, Kaplan). Structural pipe is more frequently kept

in inventory. 150 CR at II-16, PR at II-12. 151 See CR/PR at Tables E-1 and E-2. 152 CR/PR at Tables IV-9 and C-1. 153 CR/PR at Tables III-4 and C-1. 154 CR/PR at Table III-3. 155 CR/PR at Table III-3; Conf. Tr. at 29 (Stupp); Conf. Tr. at 165-66 (Kristofic). 156 CR/PR at Table III-3. 157 CR/PR at Tables IV-9 and C-1. 158 CR/PR at Tables IV-9 and C-1. 159 CR/PR at Tables IV-9 and C-1.

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half of responding U.S. producers and importers reported that the domestic product and imports from each subject source are "always" or “frequently” used interchangeably.161

Quality is an important consideration when LDWP suppliers are considered for a project.162 Purchasers may require certain more stringent specifications in addition to the API specifications.163 While LDWP producers also must be on the purchaser’s approved manufacturer list (“AML”) to be considered for a project, the record indicates that AMLs generally include several import and domestic sources.164

The current record indicates that price is an important factor in purchasing decisions for LDWP.165 Producers and importers were asked to assess how often factors other than price were significant in sales between LDWP produced in the United States, subject, or nonsubject countries. Most U.S. producers reported that there were “never” differences other than price between subject merchandise and domestically produced LDWP, and most importers reported that there were “sometimes” or “never” differences other than price between subject imports and domestic LDWP.166

Bidding is usually used to award contracts for purchase of LDWP, with awards often made after multiple rounds of bidding.167 Twenty of 22 purchasers reported using bids for at least some portion of their purchases of LDWP.168 The bidding process for awarding contracts heightens price competition in the market for LDWP.169

As described above with respect to domestic like product, LDWP is produced by one of three production processes: ERW, HSAW, or LSAW. ERW is typically used for LDWP up to 24

(…Continued)

160 CR at II-16, PR at II-12. In any final phase investigations, we will further examine the extent to which line pipe is used in structural applications. See Petitioners’ Postconference Brief, Exhibit 1, at 15 (stating that API line pipe is required for certain structural applications).

161 See CR/PR at Table II-7. 162 Quality was the most frequently ranked first among purchasing considerations. See CR/PR at

Table II-6. 163 See Conf. Tr. at 144 (Pipeline operators often require line pipe with physical, chemical, and

mechanical specifications that exceed the API specifications.) (Kristofic). 164 Conf. Tr. at 83. Respondents Corinth, Welspun, SeAH, and purchaser Plains have argued that

certain line pipe products are not produced in the United States. Corinth’s Postconference Brief at 19; Welspun’s Postconference Brief at 5; Plains’ Confidential Statement at 1. However, petitioners counter that they make the products that respondents claim cannot be produced in the United States. Petitioners’ Postconference Brief at 23. In any final phase investigations, we will further examine the extent to which the domestic industry is able to produce all LDWP products. We are particularly interested in the proven rather than theoretical ability to supply projects given the importance of the quality of the line pipe and project-specific additions to standards used in such applications as oil and gas transmission.

165 Price was the most often cited top-three factors purchasers consider in their purchasing decisions. See CR/PR at Table II-6.

166 See CR/PR at Table II-8. 167 Conf. Tr. at 95-97 (Clark, Riemer, De Mey) 168 CR at II-18, PR at II-13. See also Lost Sales Lost Revenue Survey at Question 6. 169 Conf. Tr. at 51-52, 70-72 (Kaplan Clark, Riemer, Stupp, Norris).

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inches O.D. while HSAW or LSAW is predominantly used for larger diameter LDWP.170 LSAW is the most expensive of the three processes but it enables production of LDWP with greater wall thicknesses.171 All three production processes are used to produce line pipe and structural pipe in the United States.172

The primary raw material used to manufacture LDWP is either hot-rolled coil or cut-to-length plate, depending on production process.173 The ERW and HSAW production processes use hot-rolled coil while LSAW uses cut-to-length plate.174 Raw material prices, as reflected in the price of hot-rolled steel and cut-to-length steel plate, fluctuated over the POI.175 Typically cut-to-length steel plate is more expensive per ton than hot-rolled steel, but the price gap narrowed over the POI.176 The domestic industry’s costs as reflected in the unit cost of goods sold (COGS) per short ton fell from $1,009 per short ton in 2015 to $956 per short ton in 2016 and then $931 per short ton in 2017.177 Raw material costs, as a share of U.S. producers’ total COGS, fluctuated during the period but overall declined slightly from 77.8 percent in 2015 to 76.8 percent in 2017.178

C. Volume of Subject Imports

Section 771(7)(C)(i) of the Tariff Act provides that the “Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States, is significant.”179

Cumulated subject imports fluctuated, but had a substantial and increasing presence in the U.S. market during the POI.180 The volume of cumulated subject imports decreased from 819,417 short tons in 2015 to 430,038 short tons in 2016, and then increased to 865,579 short tons in 2017, a level 5.6 percent higher than in 2015.181

Cumulated subject imports increased and gained market share at the expense of the domestic industry. Subject imports’ share of apparent U.S. consumption decreased from 26.2

170 See CR/PR at Table I-2. 171 See CR/PR at Table I-2. 172 CR/PR at Table E-1 and E2. 173 CR/PR at V-1. 174 CR at VI-10, PR at VI-9. Welspun argues that the Korean hot-rolled steel it needed to produce

line pipe for one of its projects became prohibitively expensive once antidumping duties were imposed. Welspun’s Postconference Brief at 14-16.

175 See CR/PR at Fig. V-1. 176 See CR at Fig. V-1. 177 CR/PR at Table VI-1. 178 CR/PR at Table VI-1. 179 19 U.S.C. § 1677(7)(C)(i). 180 As noted above, we have not cumulated subject imports from Greece for purposes of our

material injury analysis. 181 CR/PR at Table C-1. In view of the limited coverage of imports from certain subject countries

and from nonsubject sources, we have relied on official import statistics for import volumes in the preliminary phase of these investigations. CR at I-5, PR at I-4; CR/PR at Table IV-2.

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percent in 2015 to 19.3 percent in 2016 and then increased to 37.6 percent in 2017, an overall increase of 11.5 percentage points.182

In light of the foregoing, we find that the volume of cumulated subject imports and the increase in the volume of cumulated subject imports are significant in both absolute terms and relative to consumption.

D. Price Effects of the Subject Imports

Section 771(7)(C)(ii) of the Tariff Act provides that, in evaluating the price effects of subject imports, the Commission shall consider whether –

(I) there has been significant price underselling by the imported merchandise as compared with the price of domestic like products of the United States, and

(II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.183

As addressed in section VII.B. above, the record indicates that there is a high degree of substitutability between subject imports and the domestic like product and that price is an important factor in purchasing decisions.

Ten domestic producers and nine importers of subject merchandise provided usable quarterly f.o.b. price data for six LDWP pricing products,184 although not all firms reported pricing for all products for all quarters.185

182 CR/PR at Tables IV-7, C-1. Welspun asserts that the increase in subject imports from India in

2017 accounts for the overall increase in subject imports and that the vast majority of subject imports from India in 2017 were for ***. It claims that no domestic producer could produce the line pipe needed for the *** project and that the Korean hot-rolled steel needed to produce pipe for the second project, ***, became prohibitively expensive due to the imposition of antidumping duties. Welspun’s Postconference Brief at 3-10. However, petitioners have provided documentation indicating that ***. See Petitioners’ Postconference Brief at Exhibit 2. Furthermore, rather than indicating an inability to produce the LDWP domestically, Welspun’s explanation for importing LDWP from India for the *** project suggests that importing from India was cheaper than producing the pipe in the United States.

183 19 U.S.C. § 1677(7)(C)(ii). 184 CR at V-5, PR at V-3. Product 1 is line pipe, 42” OD, 0.600”- 1.000” wall, API 5L X52-X70,

regardless of length. Product 2 is line pipe, 32”- 36” OD, 0.350”- 0.800” wall, API 5L X52-X70, regardless of length. Product 3 is line pipe, 26”- 30” OD, 0.350”- 0.800” wall, API 5L X52-X70, regardless of length. Product 4 is structural pipe, 18”- 24” OD, 0.375”- 0.750” wall, ASTM A252, A1035, or similar, regardless of length. Product 5 is structural pipe, >24”- 32” OD, 0.500”- 1.000” wall, ASTM A252, A1035, or similar, regardless of length. Product 6 is line pipe, 20”- 24” OD, 0.300”- 0.500” wall, API 5L X60-X70, regardless of length. CR at V-5, PR at V-3.

185 Pricing data reported by the domestic industry accounted for approximately 85.1 percent of U.S. producers’ shipments of product, 98.7 percent of U.S. shipments of subject imports from Canada, 45.2 percent of U.S. shipments of subject imports from India, 8.9 percent of U.S. shipments of subject (Continued…)

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Cumulated subject imports undersold the domestic like product in 35 of 97 quarterly comparisons, or 36.1 percent of comparisons, at margins ranging from 1.3 percent to 46.7 percent.186 There were 205,939 short tons of subject import shipments involved in quarters with underselling and 525,069 short tons of subject import shipments involved in quarters with overselling.187 Thus, on a volume basis, 28.2 percent of reported subject imports undersold the domestic product. This underselling was concentrated in pricing product 1.188

The parties appear to agree that the utility of the pricing data is limited in these investigations as both petitioners and respondents take issue with the price comparison data collected through questionnaires in the preliminary phase of these investigations.189 In any final phase investigations we will consider collecting price product and/or bid data that better reflect price comparisons and the project-based nature of competition in this market.190

Lost sales data support a finding that cumulated subject imports were often priced lower than the domestic product. Nine U.S. producers reported 50 instances of lost sales and identified 63 firms where they lost sales or revenue.191 Seventeen purchasers responding to the lost sales/lost revenue survey indicated that they purchased subject imports instead of the domestic product during the POI, and 15 purchasers reported that subject import prices were

(…Continued) imports from Korea, and 25.7 of U.S. shipments of subject imports from Turkey in 2017. No importer reported price data for its U.S. shipments of subject imports from China. CR at V-5 to V-6, PR at V-4.

186 CR/PR at Table V-10. 187 CR/PR at Table V-10. 188 See CR/PR at Table V-11. Petitioners urge the Commission to utilize average unit values

(“AUVs”) to assess relative price levels, observing that subject import AUVs (whether based on official import statistics or based on U.S. importers’ reported shipments) were consistently lower than the domestic industry’s shipments AUVs in each year of the POI. Petitioners’ Postconference Brief at 30. We generally view AUV data with caution, because differences in AUVs may reflect differences in product mix or channels of distribution. See Allegheny Ludlum Corp. v. United States, 287 F.3d 1365, 1373-74 (Fed. Cir. 2002).

189 Respondents contend that the pricing data do not account for the project-based nature of competition or reflect that prices may have been negotiated months or quarters before the shipments were made. They further argue that the pricing products are overly broad product categories including products made by different production processes with different raw materials having different costs. Evraz’s Postconference Brief at 27-28; Borusan’s Postconference Brief at 21; Welspun Postconference Brief at 12-13. Respondents suggest narrowing the pricing products or collecting price information reflecting the bids submitted for various projects. Evraz’s Postconference Brief at 27; Borusan’s Postconference Brief at 21; Welspun Postconference Brief at 13. Petitioners similarly contend that the data do not account for the lag between award and delivery and many of the subject import prices in the reported data would have been set prior to or in the earlier portion of the POI. They also argue that the ***. Petitioners’ Postconference Brief at 28-29.

190 We invite the parties in comments on draft questionnaires in any final phase investigations to suggest how pricing information should be collected to improve the pricing product comparisons and account for the project-based competition in the LDWP market.

191 CR at V-29 to V-30, PR at V-11 to V-12.

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lower than prices for U.S.-produced product.192 Thirteen of these purchasers indicated that price was a primary reason for purchasing subject imports.193 These responses to the lost sales/lost revenue survey demonstrate that purchasers increased their purchases of subject imports at the expense of purchases of the domestic product, and in many instances prices for subject imports were reported as the reason for the shift from the domestic like product. This supports a finding that cumulated subject imports were often priced lower than the domestic like product and that subject imports gained sales as a result of lower prices.

We also consider whether the subject imports had significant price-depressing effects. Prices for domestically produced LDWP declined overall for the six pricing products, with declines of *** percent, *** percent, *** percent, *** percent, *** percent and *** percent respectively, from January 2015 to December 2017.194 In general, prices fell during 2015 and 2016 before recovering slightly during 2017.195 At the same time domestic prices for LDWP were decreasing, apparent U.S. consumption also sharply declined.196 Moreover, the domestic industry’s raw material costs declined overall during the POI.197 Accordingly, we cannot conclude on the record of the preliminary phase of these investigations that the increasing volume of subject imports had significant price-depressing effects on the prices of the domestic like product. We will seek additional information in any final phase of these investigations as to the factors that contributed to price declines for domestically produced LDWP, including the extent to which declining apparent U.S. consumption and raw material costs contributed to the price declines observed during the POI.

We also assess the extent to which subject imports prevented price increases during the POI. While the domestic industry’s prices for LDWP declined during the POI, raw material costs and the industry’s unit COGS also declined from 2015 to 2017.198 As noted above, demand as reflected in apparent U.S. consumption decreased overall by 26.5 percent. We find that price increases for LDWP would not have been likely given these declines in demand and costs. Accordingly, we do not find that the subject imports prevented price increases, which otherwise would have occurred, to a significant degree.199

192 CR/PR at Table V-16b (without Greece). 193 CR/PR at Table V-16b (without Greece). Twelve purchasers indicated that lower prices were

the reason they purchased *** short tons of LDWP from subject sources instead of domestically produced product during the POI. CR/PR at Table V-16b (without Greece). Other purchasers indicated that quality, availability, required product specifications, approved manufacturers list, project schedule, and extended payment terms were non-price reasons for purchasing imported rather than U.S.-produced product. CR at V-34 to V-35, PR at V-16.

194 CR/PR at Table V-9. 195 See CR at Figs. V-2 to V-7. 196 See CR/PR at Table IV-8. Apparent U.S. consumption declined by 29 percent from 2015 to

2016. CR/PR at Table C-1. 197 See CR/PR at Table VI-1. 198 CR/PR at Table C-1. 199 We have also considered that 3 of 22 responding purchasers reported that U.S. producers

reduced prices in order to compete with lower priced subject imports. CR/PR at Table V-18.

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We have considered the lost sales, the shifts by several purchasers from the domestic product to subject imports involving a substantial volume of LDWP, and the underselling reflected in the price comparisons. In light of these data, for purposes of our preliminary determinations, we find that as a result of low-priced subject imports, the domestic industry lost market share. Therefore, for purposes of the preliminary phase of these investigations, we find that subject imports had significant price effects.

E. Impact of the Subject Imports200

Section 771(7)(C)(iii) of the Tariff Act provides that the Commission, in examining the impact of the subject imports on the domestic industry, “shall evaluate all relevant economic factors which have a bearing on the state of the industry.” These factors include output, sales, inventories, capacity utilization, market share, employment, wages, productivity, gross profits, net profits, operating profits, cash flow, return on investment, return on capital, ability to raise capital, ability to service debt, research and development, and factors affecting domestic prices. No single factor is dispositive and all relevant factors are considered “within the context of the business cycle and conditions of competition that are distinctive to the affected industry.”201

As discussed above, subject imports captured market share at the expense of the domestic industry during the POI. Subject imports’ share of apparent U.S. consumption first decreased from 26.2 percent in 2015 to 19.3 percent in 2016, but then increased to 37.6 percent in 2017, an overall increase of 11.4 percentage points.202 By comparison, the domestic industry lost 3.1 percentage points of market share from 2015 to 2017, as its share of apparent U.S. consumption initially increased from 57.0 percent in 2015 to 66.5 percent in 2016, before declining to 53.9 percent in 2017.203

All of the domestic industry’s output indicia declined over the POI, and it reported declines in production and shipments that exceeded the 26.5 percent decline in apparent U.S. consumption during the POI.204 From 2015 to 2017, the domestic industry’s production declined by 37.5 percent,205 its capacity declined by 1.3 percent,206 its capacity utilization

200 In its notice initiating the antidumping duty investigations concerning LDWP, Commerce

reported estimated antidumping duty margins of 50.89 percent for Canada, 120.84 to 132.63 percent for China, 37.94 percent for India, 16.18 to 20.39 percent for Korea, and 66.09 percent for Turkey. Large Diameter Welded Pipe from Canada, Greece, India, the People’s Republic of China, the Republic of Korea, and the Republic of Turkey: Initiation of Less-Than-Fair-Value Investigations, 83 FR 7154, 7159 (Feb. 20, 2018).

201 19 U.S.C. § 1677(7)(C)(iii). This provision was amended by the Trade Preferences Extension Act of 2015, Pub. L. 114-27.

202 CR/PR at Tables IV-9 and C-1. 203 CR/PR at Tables IV-9 and C-1. 204 See CR/PR at Table C-1. 205 The domestic industry’s production declined from 1.95 million short tons in 2015 to 1.39

million short tons in 2016 and 1.22 million short tons in 2017. CR/PR at Table III-4. 206 The domestic industry’s capacity increased from 3.81 million short tons in 2015 to 3.90

million short tons in 2016 and then decreased to 3.76 million short tons in 2017. CR/PR at Table III-4.

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declined by 18.9 percentage points,207 and its U.S. shipments, by quantity, declined by 30.5 percent.208 Despite apparent U.S. consumption being 3.5 percent higher in 2017 than in 2016, the domestic industry was unable to take advantage of the increase due to the surge in cumulated subject imports that occurred in 2017. Rather, in 2017, the domestic industry’s capacity, production, and shipments (by quantity) were all lower than the previous year.209

The domestic industry’s employment indicia also generally reflect steep declines over the POI. From 2015 to 2017, the domestic industry reported a loss of 889 production related workers, a decline of 30.3 percent.210 Hours worked declined by 36.1 percent and wages paid declined by 35.0 percent over the POI.211 Hourly wages increased by 1.4 percent from 2015 to 2017,212 but productivity declined overall from 2015 to 2017.213 The industry’s capital expenditures also declined.214

207 The domestic industry’s capacity utilization declined from 51.3 percent in 2015 to 35.7

percent in 2016 and 32.4 percent in 2017. CR/PR at Table III-4. Borusan claims that the domestic industry’s capacity utilization was low due to significant constraints on the domestic supply of hot-rolled coil and cut-to-length plate inputs for LDWP, due to recently imposed antidumping and countervailing duty orders. Borusan’s Postconference Brief at 19-20. Evraz argues that the project-based nature of LDWP demand means that demand and excess capacity for producers will fluctuate and periods of low capacity utilization are inevitable. Evraz’s Postconference Brief at 36. In any final phase investigations, we will seek additional information concerning the factors responsible for the domestic industry’s declining utilization rate.

208 By quantity, U.S. producers’ U.S. shipments declined from 1.78 million short tons in 2015 to 1.48 million short tons in 2016 and 1.24 million short tons in 2017. CR/PR at Table III-6. The domestic industry had decreasing inventories during the POI. U.S. producers’ end-of-period inventories decreased from 2015 to 2017, declining from 262,489 short tons in 2015 to 176,042 short tons in 2016 and 137,593 short tons in 2017. CR/PR at Table III-7. The ratios of U.S. producers’ end-of-period inventories to U.S. production, U.S. shipments, and total shipments all decreased from 2015 to 2017. Id.

209 See CR/PR at Table C-1. 210 The number of production related workers was 2,938 in 2015, 2,310 in 2016, and 2049 in

2017. CR/PR at Table III-9. 211 Total hours worked were 6.29 million hours in 2015, 4.68 million hours in 2016, and 4.02

million hours in 2017. Id. Wages paid were $181.69 million in 2015, $136.50 million in 2016, and $118.07 million in 2017. CR/PR at Table III-9.

212 Hourly wages were $28.87 per hour in 2015, $29.17 per hour in 2016, and $29.37 per hour in 2017. CR/PR at Table III-9.

213 Productivity was 310.3 shorts tons per hour in 2015, 297.7 short tons per hour in 2016, and 303.5 short tons per hour in 2017. CR/PR at Table III-9.

214 The domestic industry’s capital expenditures were $102.96 million in 2015, $41.47 million in 2016, and $19.43 million in 2017. CR/PR at Table VI-4. The industry’s research and development expenses were $3.95 million in 2015, $4.35 million in 2016 and $4.16 million in 2017. CR/PR at Table VI-4.

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The domestic industry’s unit net sales value,215 total sales revenues,216 gross profits, operating income, and operating income ratio all decreased from 2015 to 2017,217 but the industry experienced an increase in net income during the same period.218

For purposes of the preliminary phase of these investigations, we find that subject imports had a significant impact on the domestic industry. Low-priced subject imports increased significantly in absolute terms and relative to consumption during the POI, and captured market share from the domestic industry. Declines in the domestic industry’s production and shipments outpaced the decrease in demand between 2015 and 2016, and the declines continued when demand recovered in 2017. As a result, the domestic industry’s capacity utilization, employment, revenues, and profits were lower than they would have otherwise been throughout the POI. In light of these considerations, we find that subject imports had a significant adverse impact on the domestic industry.

We have considered whether there are other factors that may have had an impact on the domestic industry during the POI to ensure that we are not attributing injury from such other factors to subject imports. As discussed above, nonsubject imports decreased their presence in the U.S. market over the POI.219 Furthermore, while apparent U.S. consumption decreased overall from 2015-17, this overall decrease cannot explain the domestic industry’s declines in market share, output, and revenues during 2017 when demand improved. Thus, other factors cannot explain the loss in market share, output, and revenues that we have attributed to the cumulated subject imports.

For the foregoing reasons, we find that the record of the preliminary phase of these investigations supports a determination that there is a reasonable indication of material injury by reason of cumulated subject imports from Canada, China, India, Korea, and Turkey.

215 The industry’s average unit net sales value declined from $1,155 per short ton in 2015 to

$1,045 per short ton in 2016 and then increased slightly to $1,051 per short ton in 2017. CR/PR at Table VI-1.

216 The domestic industry’s total sales revenues declined from $2.13 billion in 2015 to $1.54 billion in 2016, and then to $1.31 billion in 2017. CR/PR at Table VI-1

217 Gross profits decreased from $269.60 million in 2015 to $131.00 million in 2016 and then increased to $148.53 million in 2017. CR/PR at Table VI-1. Operating income declined from $137.98 million in 2015 to $27.82 million in 2016, but then increased to $66.49 million in 2017. Id. Operating income as a ratio of net sales declined from 6.5 percent in 2015 to 1.8 percent in 2016, but then increased to 5.1 percent in 2017. Id.

218 The increase in net income for the U.S. industry in 2017 reflects, in part, the data of ***, as well as a ***. The domestic industry’s net income was $*** in 2015, *** in 2016, and $*** in 2017. CR/PR at Table VI-1. The industry’s return on investment expressed as a ratio of operating income to net assets declined from 7.3 percent in 2015 to 1.9 percent in 2016 and then improved to 5.3 percent in 2017. CR/PR at Table VI-5.

219 CR/PR at Table C-1. Subject imports from Greece also declined during the POI. Id.

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VIII. Reasonable Indication of Threat of Material Injury by Reason of Allegedly Dumped Subject Imports from Greece

As discussed earlier, we have determined that subject imports from Greece would imminently account for more than three percent of all subject merchandise imported into the United States. Therefore we proceed to determine whether there is a reasonable indication that the U.S. industry is threatened with material injury by reason of subject imports from Greece that are allegedly sold at LTFV.

A. Legal Standard

Section 771(7)(F) of the Tariff Act directs the Commission to determine whether there is a reasonable indication that the U.S. industry is threatened with material injury by reason of subject imports by analyzing whether “further dumped or subsidized imports are imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension agreement is accepted.”220 The Commission may not make such a determination “on the basis of mere conjecture or supposition,” and considers the threat factors “as a whole” in making its determination whether dumped or subsidized imports are imminent and whether material injury by reason of subject imports would occur unless an order is issued.221 In making our determinations, we consider all statutory threat factors that are relevant to these investigations.222

220 19 U.S.C. § 1677(7)(F)(ii). 221 19 U.S.C. § 1677(7)(F)(ii). 222 These factors are as follows: (I) if a countervailable subsidy is involved, such information as may be presented to it by the

administering authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies Agreement) and whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial increase in production capacity in the exporting country indicating the likelihood of substantially increased imports of the subject merchandise into the United States, taking into account the availability of other export markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise indicating the likelihood of substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices that are likely to have a significant depressing or suppressing effect on domestic prices and are likely to increase demand for further imports,

(V) inventories of the subject merchandise, (VI) the potential for product-shifting if production facilities in the foreign country, which can be

used to produce the subject merchandise, are currently being used to produce other products, … (VIII) the actual and potential negative effects on the existing development and production

efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and (Continued…)

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B. Cumulation for Threat

We must consider whether to cumulate allegedly dumped subject imports from Greece with those from other sources eligible for cumulation. In contrast to cumulation for material injury, cumulation for a threat analysis is discretionary. Under Section 771(7)(H) of the Tariff Act, the Commission may “to the extent practicable” cumulatively assess the volume and price effects of subject imports from all countries as to which petitions were filed on the same day if the requirements for cumulation in the material injury context are satisfied.223 Subject imports from Canada, China, India, Korea, and Turkey are eligible for cumulation with allegedly dumped subject imports from Greece for purposes of the threat of material injury analysis.224

Petitioners contend that the Commission should cumulate all subject imports for purposes of the threat analysis.225 While no respondent specifically addressed cumulation for a threat analysis concerning subject imports from Greece, Evraz and Welspun argue that subject imports from Canada and India should not be cumulated on the basis that they each compete under different conditions of competition than other subject sources.226 Welspun also argues that the volume of imports from India followed a different trend than the other subject imports over the period of investigation.227

We previously found in Section VI.B. that there is a reasonable overlap of competition between subject imports from the five subject countries, other than Greece, and between subject imports from each source and the domestic like product. The considerations discussed above concerning reasonable overlap of competition apply equally to subject imports from Greece, as discussed below. Accordingly, we find that it is appropriate to exercise our discretion to cumulate subject imports from Canada, China, Greece, India, Korea, and Turkey for purposes of our threat analysis.

(…Continued)

(IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually being imported at the time).

19 U.S.C. § 1677(7)(F)(i). To organize our analysis, we discuss the applicable statutory threat factors using the same volume/price/impact framework that applies to our material injury analysis. Statutory threat factors (I), (II), (III), (V), and (VI) are discussed in the analysis of subject import volume. Statutory threat factor (IV) is discussed in the analysis of subject import price effects. Statutory factors (VIII) and (IX) are discussed in the analysis of impact. Statutory factor (VII) concerning agricultural products is inapplicable to these investigations.

223 19 U.S.C. § 1677(7)(H). 224 See 19 U.S.C. § 1677(7)(H); see generally Cold-Rolled Steel Flat Products from Brazil, India,

Korea, Russia, and the United Kingdom, Inv. Nos. 701-TA-540, 542-544 and 731-TA-1283, 1285, 1287, and 1289-1290 (Final), USITC Pub. 4637 at 24 (Sept. 2016).

225 Petitioners’ Postconference Brief at 37-38 226 Evraz Postconference Brief at 18-23 Welspun’s Postconference Brief at 19-20. 227 Welspun’s Postconference Brief at 20-22.

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Fungibility. There is a high degree of substitutability between domestically produced LDWP and LDWP imported from Greece, and among LDWP imported from all subject countries.228 When comparing the domestic product to subject imports from Greece, the majority of responding U.S. producers and importers reported that the domestic product and imports from Greece are “always” or “frequently” used interchangeably.229 When comparing subject imports from Greece and the other five subject countries, a majority of U.S. producers indicated that LDWP from each subject source is “always” or “frequently” used interchangeably.230 In no instances, when comparing the domestic product or subject imports from the other five subject countries and subject imports from Greece, did any U.S. producers or importers report that they were never interchangeable.231 Moreover, most U.S. producers reported that there were “never” differences other than price between the domestic product or subject imports from the other five subject countries and subject imports from Greece, while most importers reported that there were “sometimes” or “never” differences other than price.232

Channels of Distribution. Subject imports from Greece, subject imports from the other five subject countries, and the domestic product shared the same general channels of distribution. During the period of investigation, domestic producers and importers of subject imports from Canada, China, India, and Greece were sold *** to end users.233 Subject imports from Korea and Turkey were sold to end users as well as distributors.234

Geographic Overlap. Domestic product, subject imports from Greece, and subject imports from the other five subject countries were sold in the same geographic markets. U.S. producers reported selling LDWP to all regions of the contiguous United States.235 Subject imports from all subject countries, including Greece, were sold in the Northeast and Central Southwest, and subject imports from all subject countries, including Greece but not Canada, were present in the Southeast.236

Simultaneous Presence in the Market. Domestic product, subject imports from Greece, and subject imports from the other five subject countries were simultaneously present in the U.S. market. Subject imports from Greece were present in the U.S. market in 21 months of the 36 months of the POI, January 2015-December 2017.237

We find that there is a reasonable overlap of competition between subject imports from all six subject countries and between subject imports from each subject source and the domestic like product. Moreover, there is no information on the record to suggest that the reasonable overlap of competition between and among subject imports and the domestic like

228 CR at II-16, PR at II-12. 229 CR/PR at Table II-7. 230 CR/PR at Table II-7. 231 CR/PR at Table II-7. 232 CR/PR at Table II-8. 233 CR/PR at Table II-1. 234 CR/PR at Table II-1. 235 CR/PR at Table II-2. 236 CR/PR at Table II-2. 237 CR/PR at Table II-2.

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product that now exists will not continue into the imminent future. We recognize the potential for some differences in conditions of competition and volume trends among subject imports from the six countries, but find that they are not significant enough to warrant not cumulating allegedly dumped subject imports from Greece with the other subject imports.

For these reasons, we conclude that it is appropriate to exercise our discretion to cumulate subject imports from Greece with the other subject imports in the preliminary phase of these investigations for our analysis of whether there is a reasonable indication of a threat of material injury to the domestic industry.

C. Analysis of Threat of Material Injury Factors

1. Likely Volume

We found in Section VII.C. above that the volume of cumulated subject imports from Canada, China, India, Korea, and Turkey and the increase in the volume of these imports over the POI was significant in absolute terms and relative to consumption. When we add subject imports from Greece to the cumulated volume of subject imports for purposes of our threat analysis, our findings regarding the likely volume are the same.

First, the data indicate that there is substantial existing unused capacity in the cumulated subject industries. The combined excess capacity for the responding industries in Canada, Greece, India, Korea, and Turkey amounted to *** million short tons in 2017.238 This figure is more than *** times total subject imports from those five countries in 2017 and equivalent to *** percent of total apparent U.S. consumption in 2017.239 Furthermore, the combined excess capacity for these five countries is projected to increase in 2018 to *** million short tons,240 and the producers in the subject countries export in significant quantities, indicating the likelihood of substantially increased subject imports into the United States. Total export shipments of the industries in Canada, Greece, India, Korea, and Turkey increased from *** million short tons and *** percent of their total shipments in 2015 to *** million short tons and *** percent of their total shipments in 2017.241 These data on subject producers’ aggregate excess capacity and exports do not include data for the industry in China because no subject producers in China responded to the Commission’s questionnaire.242 Public data indicate, however, that China is the world’s largest LDWP exporter. China’s global exports of LDWP were 1.26 million short tons in 2014, 1.46 million short tons in 2015, and 1.33 million

238 Derived from CR/PR at Table VII-25. The subject countries combined industry data in Table

VII-25 do not include data for the industry in China because no subject producers in China responded to the Commission’s questionnaire. Specific coverage for each of the other subject foreign industries is indicated in the confidential report. CR at I-5, PR at I-4. The data are thus understated. CR at VII-9, PR at VII-7.

239 Derived from CR/PR at Tables IV-2, IV-8. 240 Derived from CR/PR at Table VII-25. 241 CR/PR at Table VII-25. 242 CR at VII-9, PR at VII-7.

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short tons in 2016, or 13.6 percent in 2014, 18.4 percent in 2015, and 20 percent in 2016 of total global exports.243

Second, the data indicate that there was a significant rate of increase in cumulated subject import volume and market penetration during the POI. Despite a decline in cumulated subject import volume from 2015 to 2016, these imports were higher in 2017, at 879,433 short tons, than in 2016, at 520,840 short tons, a 68.8 percent increase.244 Cumulated subject import market share also declined from 2015 to 2016, but was higher in 2017, at 38.2 percent, than in 2016, at 23.4 percent, a rise of 14.8 percentage points.245 In comparison, apparent U.S. consumption increased by only 3.5 percent from 2016 to 2017.246 U.S. importers reported that they have arranged for *** short tons of subject LDWP, nearly *** percent of subject import volume in 2017, to be imported in 2018.247 Additionally, LDWP from the subject countries is subject to antidumping or countervailing duty measures in third countries.248

Third, responding firms from Canada, Greece, Korea, and Turkey reported that they produced a total of *** short tons of out-of-scope product in 2017 using the same machinery used to produce subject LDWP, or *** percent of their total production in 2017.249 Thus, there exists the potential for product-shifting. Responding producers and exporters from Canada, Greece, Korea, and Turkey also reported that they held *** short tons of LDWP in inventory at the end of 2017.250

In light of increases in cumulated subject import volume and market penetration observed during the POI, the substantial cumulated excess capacity of the subject industries and their demonstrated ability to supply export markets, the potential for product shifting, and existing inventories of subject LDWP, we find that the significant increase in cumulated subject

243 CR/PR at Table VII-28. 244 CR/PR at Table IV-2. 245 CR/PR at Table IV-9. 246 CR/PR at Table IV-8. 247 CR/PR at Table VII-27. Notably, of the *** short tons of LDWP that have been arranged to be

imported in 2018, *** short tons (*** percent) are to be imported from Greece. CR/PR at Table VII-27. 248 The record indicates that Mexico and Canada have imposed antidumping or countervailing

duty orders on similar line pipe products to those covered under these investigations from India, China, and Korea, among other countries. See Petitioners’ Postconference Brief, Exhibit 1 at 36.

249 CR/PR at Table VII-26. 250 CR/PR at Table VII-25. We also considered the nature of the countervailable subsidies.

Commerce has initiated countervailing duty investigations on: 28 alleged subsidy programs in China, including two export subsidy programs, three grant programs, and one Foreign-Invested Enterprises (FIEs) program that appear to be directed to exports; 70 alleged subsidy programs in India, including five export-oriented unit programs and the Export Promotion of Capital Goods scheme that appear to be directed to exports; 20 alleged subsidy programs in Korea, including a Korean Export-Import Bank subsidy program and two Korea Trade Insurance Corporation (K-SURE) programs that appear to be directed to exports; and 20 alleged subsidy programs in Turkey, including at least three programs (Deduction from Taxable Income for Export Revenue, a Pre-Export Credits Program, and Export Insurance Provided by Turk Eximbank) that appear to be directed to exports. CR at I-7 to 12, PR at I-6 to I-11.

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imports into the U.S. market that occurred during the POI will likely continue in the imminent future.251

2. Likely Price Effects

As explained in Section VII.B.3 above, the domestic like product and subject imports are highly substitutable and price is an important consideration in purchasing decisions. We found that low-priced cumulated subject imports from Canada, China, India, Korea, and Turkey during the POI caused the domestic industry to lose market share and therefore that subject imports had significant price effects. When we add subject imports from Greece to the cumulated volume of subject imports for purposes of our threat analysis, our likely price effects findings are the same.

On a cumulated basis, subject imports from Canada, China, Greece, India, Korea, and Turkey undersold the domestic like product in 45 out of 112 quarterly comparisons (40 percent), or 336,596 short tons, with underselling margins ranging from 0.5 percent to 46.7 percent.252 Lost sales data further support a finding that cumulated subject imports were often priced lower than the domestic like products. As discussed in section VII.D, 13 of 21 reporting purchasers indicated that lower price was the primary reason for purchasing subject imports rather than domestic product and 12 of such purchasers estimated a total of *** short tons of LDWP that they purchased from subject countries instead of domestic producers due to lower price.253

We have found that cumulated subject imports are likely to continue to enter the U.S. market in increasing and significant volumes in the imminent future. The substantially increased volumes of subject imports will likely continue to be sold at lower prices and displace sales of the domestic like product, as they did during the POI. The likely low prices of the subject imports, in turn, are likely to increase demand for the subject imports and cause a

251 Commerce submitted the results of its Section 232 investigation on steel imports to the

President on January 11, 2018. At the time of the Commission’s vote, the Commission had no specific information as to whether additional tariffs on the LDWP covered under these investigations would be imposed. CR at I-6 to I-7, PR at I-5 to I-6. We recognize that on March 8, 2018, the President issued a proclamation imposing a 25 percent tariff on steel. We will examine the effect of this tariff in any final phase of the investigations.

252 CR/PR at Table V-10. Subject imports from Greece undersold the domestic like product in 10 out of 15 quarterly comparisons, with underselling margins ranging from *** percent to *** percent. CR/PR at Table V-10. Pricing data collected by the Commission accounted for *** percent of subject imports from Greece. CR at V-5, PR at V-4.

253 CR/PR at Table V-15. Two purchasers indicated that lower price was the primary reason for purchasing LDWP from Greece rather than domestic product and they estimated that they purchased *** short tons of LDWP from Greece instead of from domestic producers. CR/PR at Table V-16. Furthermore, 3 of 22 responding purchasers indicated that U.S. producers had reduced prices in order to compete with lower-priced imports from Canada, Greece, and Korea. CR/PR at Table V-17. The reported estimated price reduction ranged from 3.2 to 10 percent for imports from Canada, 10 percent for imports from Greece, and 10 percent for imports from Korea. CR/PR at Table V-18.

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reduction in the domestic industry’s market share in the imminent future. Accordingly, we find that cumulated subject imports are likely to enter the U.S. market in the imminent future at prices that are likely to increase demand for further imports.

3. Likely Impact

We found in Section VII.E above that the domestic industry’s financial performance indicators declined over the POI due to the presence of significant volumes of low-priced cumulated subject imports from Canada, China, India, Korea, and Turkey, which captured market share from the domestic industry. We have also found that cumulated subject imports, including subject imports from Greece, are likely to continue to enter the U.S. market in increasing and significant volumes and likely have price effects on the domestic product in the imminent future. We conclude that the significant volumes of low-priced subject imports will likely continue to cause the domestic industry to lose market share, which will lead to adverse effects on the domestic industry’s revenues and financial performance as they did during the POI.

In Section VII.E, we have already considered other factors, including nonsubject imports, and concluded that any injury that may be attributable to these factors is distinct from the injury attributable to the subject imports. This analysis is equally pertinent to likely conditions in the imminent future. We accordingly find that further subject imports are imminent and that material injury by reason of subject imports would occur unless orders are issued on subject imports. Accordingly, we have made an affirmative determination of a reasonable indication of threat of material injury in the antidumping duty investigation of large diameter welded pipe from Greece.

IX. Conclusion

For the reasons stated above, we determine that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of LDWP from Canada, China, India, Korea, and Turkey that are allegedly sold in the United States at less than fair value and that are allegedly subsidized by the governments of China, India, Korea, and Turkey. We further determine that there is a reasonable indication that an industry in the United States is threatened with material injury by reason of imports of LDWP from Greece that are allegedly sold in the United States at less than fair value.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from petitions filed with the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by American Cast Iron Pipe Company (American), Birmingham, Alabama; Berg Steel Pipe Corp. (Berg), Panama City, Florida; Berg Spiral Pipe Corp. (Berg), Mobile, Alabama; Dura-Bond Industries, Inc. (Dura-Bond), Export, Pennsylvania; Skyline Steel (Skyline), Newington, Virginia; and Stupp Corporation (Stupp), Baton Rouge, Louisiana on January 17, 2018, alleging that an industry in the United States is materially injured and threatened with material injury by reason of subsidized and less-than-fair-value (“LTFV”) imports of large diameter welded pipe (“LDWP”)1 from Canada (LTFV only), China, Greece (LTFV only), India, Korea, and Turkey. The following tabulation provides information relating to the background of these investigations.2 3

Effective date Action

January 17, 2018

Petition filed with Commerce and the Commission; institution of Commission investigations (83 FR 3187, January 23, 2018)

February 7, 2018 Commission’s conference

February 9, 2018

Commerce’s notice of initiation (CVD Investigations: 83 FR 7148, February 20, 2018 and AD Investigations: 83 FR 7148, February 20, 2018 )

March 2, 2018 Commission’s vote March 6, 2018 Commission’s determinations March 13, 2018 Commission’s views

1 See the section entitled “The Subject Merchandise” in Part I of this report for a complete description of the merchandise subject in this proceeding.

2 Pertinent Federal Register notices are referenced in appendix A, and may be found at the Commission’s website (www.usitc.gov).

3 A list of witnesses appearing at the conference is presented in appendix B of this report.

I-2

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides

that in making its determinations of injury to an industry in the United States, the Commission--

shall consider (I) the volume of imports of the subject merchandise, (II) the effect of imports of that merchandise on prices in the United States for domestic like products, and (III) the impact of imports of such merchandise on domestic producers of domestic like products, but only in the context of production operations within the United States; and. . . may consider such other economic factors as are relevant to the determination regarding whether there is material injury by reason of imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--4

In evaluating the volume of imports of merchandise, the Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States is significant.. . .In evaluating the effect of imports of such merchandise on prices, the Commission shall consider whether. . .(I) there has been significant price underselling by the imported merchandise as compared with the price of domestic like products of the United States, and (II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.. . . In examining the impact required to be considered under subparagraph (B)(i)(III), the Commission shall evaluate (within the context of the business cycle and conditions of competition that are distinctive to the affected industry) all relevant economic factors which have a bearing on the state of the industry in the United States, including, but not limited to. . . (I) actual and potential decline in output, sales, market share, gross profits, operating profits, net profits, ability to service debt, productivity, return on investments, return on assets, and utilization of capacity, (II) factors affecting domestic prices, (III) actual and potential

4 Amended by PL 114-27 (as signed, June 29, 2015), Trade Preferences Extension Act of 2015.

I-3

negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investment, (IV) actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and (V) in {an antidumping investigation}, the magnitude of the margin of dumping.

In addition, Section 771(7)(J) of the Act (19 U.S.C. § 1677(7)(J)) provides that—5 (J) EFFECT OF PROFITABILITY.—The Commission may not determine that there is no material injury or threat of material injury to an industry in the United States merely because that industry is profitable or because the performance of that industry has recently improved.

Organization of report

Part I of this report presents information on the subject merchandise, alleged subsidy/dumping margins, and domestic like product. Part II of this report presents information on conditions of competition and other relevant economic factors. Part III presents information on the condition of the U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV and V present the volume of subject imports and pricing of domestic and imported products, respectively. Part VI presents information on the financial experience of U.S. producers. Part VII presents the statutory requirements and information obtained for use in the Commission’s consideration of the question of threat of material injury as well as information regarding nonsubject countries.

MARKET SUMMARY

LDWP is generally used to transport oil, gas, or natural gas liquids and for structural purposes. The leading U.S. producers of LDWP are American, Berg, Dura-Bond, Stupp, and Welspun, while leading producers of LDWP outside the United States include Borusan of Turkey, Corinth of Greece, Evraz of Canada, EEW Korea of Korea, and Welspun of India. The leading U.S. importers of LDWP from subject countries are *** from India; *** from Canada; *** from China; *** from Turkey; *** from Greece; and *** from Korea.

Apparent U.S. consumption of LDWP totaled approximately 2.3 million short tons ($2.2 billion) in 2017. Currently, twelve firms are known to produce LDWP in the United States. U.S. producers’ U.S. shipments of LDWP totaled 1.2 million short tons ($1.3 billion) in 2017, and accounted for 53.9 percent of apparent U.S. consumption by quantity and 58.3 percent by value. U.S. imports from subject sources totaled 879 thousand ($739 million) in 2017 and accounted for 38.2 percent of apparent U.S. consumption by quantity and 33.9 percent by

5 Amended by PL 114-27 (as signed, June 29, 2015), Trade Preferences Extension Act of 2015.

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value. U.S. imports from nonsubject sources totaled 180 thousand ($170 million) in 2017 and accounted for 7.9 percent of apparent U.S. consumption by quantity and 7.8 percent by value.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C, table C-1. Except as noted, U.S. industry data are based on questionnaire response of 11 firms believed to account for the vast majority of U.S. production.6 Twenty-two U.S. importers submitted questionnaires, representing *** percent of imports from Canada in 2017; *** percent of imports from China; *** percent of imports from Greece; *** percent of imports from India; *** percent of imports from Korea; *** percent of imports from Turkey; and *** percent of imports from nonsubject sources. In light of this coverage, U.S. imports are based on official import statistics. Producers in the subject countries submitted eleven questionnaires accounting for *** percent of exports to the United States from Canada, *** percent from China, *** percent from Greece, *** percent from India, *** percent from Korea, and *** percent from Turkey.

PREVIOUS AND RELATED INVESTIGATIONS

Commission’s Investigations

The Commission has conducted several previous import relief investigations on line pipe. Table I-1 presents information on investigations for large diameter line pipe exceeding 16 inches in diameter.

6 *** submitted its U.S. producer questionnaire response too late to be incorporated in the staff report. The firm reported *** production of *** short tons in 2017, with net sales of *** short tons valued at $*** and *** in FY 2017. The firm’s price data included *** only.

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Table I-1 LDWP: Related Commission investigations, large diameter line pipe

Investigations

Dates

Outcome Number

Product / Country

Begin

End

731-TA-183 Large Diameter Carbon Steel Welded Pipes from Brazil

March 1984

March 1985

Commission termination of investigation following withdrawal of petition

731-TA-919

Certain Welded Large Diameter Line Pipe from Japan and Mexico1

January 2001

October 2001

Japan-Commission affirmative determination1

February 2002

Mexico-Commission affirmative determination

TA-201-73 Certain Steel Products June 2001

December 2001

Commission affirmative determination, relief ended effective December 4, 20032

731-TA-919 (Review)

Certain Welded Large Diameter Line Pipe from Japan and Mexico

November 2006

October 2007

Commission affirmative determination (Japan) and negative determination (Mexico)

731-TA-919 (Second Review)

Certain Welded Large Diameter Line Pipe from Japan

October 2012

September 2013

Commission affirmative continuation of the order

731-TA-1260-1261 (Final)

Certain Welded Line Pipe from Korea and Turkey

October 2014

November 2015

Commission affirmative determination

1 The Commission found that the domestic like product as welded carbon and alloy line pipe with an outside diameter greater than 16 inches but less than 64 inches. 2 The Commission majority found that the domestic like product was welded pipe other than OCTG. The like or directly competitive product did not include welded line pipe with an outside diameter that does not exceed 16 inches (the excluded welded line pipe 16 inches or less in diameter was covered by an existing section 201 relief request on line pipe, TA-201-70). Source: Various Commission publications.

Section 232 investigation (Commerce)

On April 19, 2017, Commerce initiated a Section 232 investigation on steel imports into the United States.7 8 Section 232 investigations are initiated to determine the effects of imports of any articles on U.S. national security. Commerce submitted the results of the investigations

7 U.S. Department of Commerce website: https://www.commerce.gov/page/section-232-investigation-effect-imports-steel-us-national-security (accessed January 29, 2018).

8 Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) authorizes the Secretary of Commerce to conduct these investigations.

https://www.commerce.gov/page/section-232-investigation-effect-imports-steel-us-national-security

https://www.commerce.gov/page/section-232-investigation-effect-imports-steel-us-national-security

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to the President on January 11, 2018, and by law, the President has 90 days to decide on any potential trade remedies.9 Commerce recommended the following:

* A global tariff of at least 24% on all steel imports from all countries, or

* A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or

* A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.10

On March 1, 2018, the President remarked in a listening session with industry representatives that additional tariffs of 25 percent would be levied on steel imports for a long period of time.

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged subsidies

On February 20, 2018, Commerce published a notice in the Federal Register of the initiation of its countervailing duty investigation on LDWP from China, India, Korea, and Turkey.11 Commerce identified the following government programs in China:12

A. Government Provision of Goods and Services for Less Than Adequate

Remuneration (LTAR) B. Provision of Land for LTAR C. Preferential Loans and Interest Rates D. Grant Programs E. Tax Benefit Programs F. Support for Foreign-Invested Enterprises (FIEs) G. Export Credit Subsidies

9 U.S. Department of Commerce website: https://www.commerce.gov/news/press-releases/2018/01/statement-department-commerce-submission-steel-section-232-report (accessed January 23, 2018).

10 https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination (accessed February 23, 2918).

11 Large Diameter Welded Pipe From India, People's Republic of China, Republic of Korea, and Republic of Turkey, 83 FR 7148, February 21, 2018

12 Large Diameter Welded Pipe from China, Enforcement and Compliance Office of AD/CVD Operations Countervailing Duty Investigation Initiation Checklist, February 9, 2018.

https://www.commerce.gov/news/press-releases/2018/01/statement-department-commerce-submission-steel-section-232-report

https://www.commerce.gov/news/press-releases/2018/01/statement-department-commerce-submission-steel-section-232-report

https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination

https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination

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The following government programs in India:13

A. Duty Exemption/Remission Schemes 1. Advance License Program (ALP) 2. Advance Authorization Program (AAP) 3. Duty Free Import Authorization Scheme (DFIA Scheme) 4. Duty Drawback Program (DDB)

B. Export Oriented Units 1. Duty-Free Import of Goods, Including Capital Goods and Raw Materials

2. Reimbursements of Central Sales Tax (CST) Paid on Goods Manufactured in India

3. Duty Drawback on Fuel Procured from Domestic Oil Companies 4. Exemption from Payment of Central Excise Duty (CED) on Goods 5. Manufactured in India and Procured from a Domestic Tariff Area (DTA)

C. Export Promotion of Capital Goods Scheme (EPCGS) D. Merchandise Exports from India Scheme E. Interest Equalization Scheme F. Status Holder Incentive Scheme (SHIS) G. Pre-Shipment and Post-Shipment Export Financing H. Market Development Assistance Scheme (MDA Scheme) I. Market Access Initiative (MAI) J. Focus Product Scheme K. GOI Loan Guarantees L. Status Certificate Program M. Income Deduction Program (80-IB Tax Program) N. Special Economic Zones (SEZs)

1. Duty-Free Importation of Capital Goods and Raw Materials, Components, Consumables, Intermediates, Spare Parts, and Packing Material

2. Exemption from Payment of CST on Purchases of Capital Goods and Raw Materials, Components, Consumables, Intermediates, Spare Parts, and Packing Material

3. Exemption from Electricity Duty and Cess on Electricity Supplied to a SEZ Unit 4. SEZ Income Tax Exemption 5. Service Tax Exemption 6. Exemption from Payment of Local Government Taxes and Duties, Such as

Sales Tax and Stamp Duties 7. Steel Development Funds Loans (SDF)

13 Large Diameter Welded Pipe from India, Enforcement and Compliance Office of AD/CVD Operations Countervailing Duty Investigation Initiation Checklist, February 9, 2018.

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O. Provision of Goods and Services for Less Than Adequate Remuneration (LTAR) 1. Provision of Hot-Rolled Steel by the Steel Authority of India for LTAR 2. Provision of Captive Mining Rights for Iron Ore 3. Provision of Captive Mining Rights for Coal 4. Provision of High-Grade Iron Ore for LTAR

P. Incremental Exports Incentive Scheme Q. State Government of Andhra Pradesh (SGAP) Subsidy Programs

1. Subsidies under the SGAP Industrial Investment Promotion Policy i. Grant Under the Industrial Investment Promotion Policy: 25

Percent Reimbursement of the Cost of Land in Industrial Estates and Development Areas

ii. Grant Under the Industrial Investment Promotion Policy: Reimbursement of Power at the Rate of Rs. 0.75 per Unit

iii. Grant under the Industrial Investment Promotion Policy: 50 Percent Subsidy for Expenses Incurred for Quality Certification

iv. Grant under the Industrial Investment Promotion Policy: 50 Percent Subsidy on Expenses Incurred in Patent Registration

v. Grant under the Industrial Investment Promotion Policy: 25- or 35- Percent Subsidy in Cleaner Production Measures

vi. Tax Incentives under the Industrial Investment Promotion Policy: 100 Percent Reimbursement of Stamp Duty and Transfer Duty Paid for the Purchase of Land and Buildings and the Obtaining of Financial Deeds and Mortgages

vii. Tax Incentives under the Industrial Investment Promotion Policy: Reimbursement on VAT, CST, and State Goods and Services Tax (SGST)

viii. Tax Incentives under the Industrial Investment Promotion Policy: Exemption from SGAP Non-Agricultural Land Assessment

ix. Provision of Goods and Services for LTAR under the Industrial Investment Promotion Policy: Provision of Infrastructure for Industries Located More than 10 Kilometers from Existing Industrial Estates or Development Areas

x. Provision of Goods and Services for LTAR under the Industrial Investment Promotion Policy: Guaranteed Stable Water Prices and Reservation of Municipal Water

2. Subsidies provided by the Andhra Pradesh Industrial Investment Corporation i. APIIC’s Allotment of Land for LTAR

ii. APIIC’s Provision of Infrastructure R. State Government of Maharashtra (SGOM) Subsidy Programs

1. SGOM Sales Tax Program 2. Infrastructure Assistance for Mega Projects under the Maharashtra

Industrial Policy of 2013 and Other SGOM Industrial Promotion Policies to Support Mega Projects

3. Subsidies for Mega Projects under the Package Scheme of Incentives

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4. VAT Refunds under the SGOM Package Scheme of Incentives 5. SGOM Electricity Duty Exemptions 6. Waiving of Loan Interest by the State Industrial and Investment

Corporation of Maharashtra Ltd. (SICOM) 7. SGOM Investment Subsidies 8. SGOM Royalty Refund on Purchase of Minerals from Mine Owners with in

the State of Maharashtra for a Period of Five Years 9. SGOM Micro, Small and Medium Manufacturing Enterprise Subsidies 10. SGOM Waiver of Stamp Duty 11. SGOM Provision of Land for LTAR

S. State Government of Gujarat (SGOG) Subsidy Programs 1. SGOG’s Exemptions and Deferrals on Sales Tax for Purchases of Goods 2. SGOG’s VAT Remission Scheme Established on April 1, 2006 3. SGOG Special Economic Zone Act (SGOG SEZ Act): Stamp Duty and

Registration Fees for Land Transfers, Loan Agreements, Credit Deeds, and Mortgages

4. SGOG SEZ Act: Sales Tax, Purchase Tax, and Other Taxes Payable on Sales and Transactions

5. SGOG SEZ Act: Sales and Other State Taxes on Purchases of Inputs (Both Goods and Services) for the SEZ or a Unit within the SEZ

T. State Government of Karnataka (SGOK) Subsidy Programs 1. KIP Industrial Policy Tax Incentives 2. KIP Provision of Land for LTAR 3. KIP Provision of Iron Ore for LTAR 4. KIP Provision of Power/Electricity for LTAR 5. KIP Provision of Water for LTAR 6. KIP Provision of Roads and Port Facility Infrastructure for LTAR 7. KIP Loans 8. KIP Grants

U. State Government of Uttar Pradesh (SGUP) Subsidy Programs 1. SGUP Exemption from Entry Tax for the Iron and Steel Industry 2. SGUP Long-Term Interest Free Loans Equivalent to the Amount of VAT

and CST Paid 3. SGUP’s Interest Free Loans Under the SGUP Industrial Development

Promotion Rules 2003

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The following government programs in Korea:14

A. Energy Savings Programs 1. Demand Response Resources Program 2. Management of Electricity Factor Load Program

B. Korean Export-Import Bank Subsidy Programs C. Korea Development Bank (KDB) Loans

1. Short-Term Discounted Loans for Export Receivables D. Korea Trade Insurance Corporation (K-SURE) - Export Insurance and Export Credit

Guarantees 1. K-SURE Export Credit Insurance 2. Export Credit Guarantees

E. Energy and Resource Subsidies 1. Loans from the Korean Resources Corporation and the Korea National Oil

Corporation F. Tax Programs under the Restriction of Special Taxation Act (RSTA)

1. RSTA Article 10 2. RSTA Article 22 3. RSTA Article 24 4. RSTA Article 25 5. RSTA Article 26 6. RSTA Article 120

G. Subsidies to Companies Located in Certain Economic Zones 1. Tax Reductions and Exemptions in Free Economic Zones 2. Exemptions and Reductions of Lease Fees in Free Economic Zones 3. Grants to Companies in Free Economic Zones 4. Acquisition and Property Tax Benefits to Companies Located in Industrial

Complexes H. Other Grant Programs

1. Industrial Grants Pursuant to the Industrial Technology Innovation Promotion Act (ITIPA)

2. Modal Shift Program 3. Sharing of Working Opportunities/Employment Creating Incentives

14 Large Diameter Welded Pipe from the Republic of Korea, Enforcement and Compliance Office of AD/CVD Operations Countervailing Duty Investigation Initiation Checklist, February 9, 2018.

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The following government programs in Turkey:15

A. Provision of Hot-Rolled Steel for Less than Adequate Remuneration (LTAR) B. Provision of Cut-to-Length Plate (CTL Plate) for LTAR C. Provision of Land for LTAR D. Deductions from Taxable Income for Export Revenue E. Rediscount Program (Short-Term Pre-Shipment Rediscount Program) F. Post-Shipment Discount Program G. Pre-Export Credits Program H. Export Insurance Provided by Turk Eximbank I. Investment Encouragement Program Customs Duty and Value Added Tax (VAT)

Exemptions J. Investment Incentive Program

1. VAT and Customs Duty Exemptions 2. VAT Refund 3. Tax Reductions 4. Income Tax Withholding 5. Social Security and Interest Support 6. Land Allocation

K. Comprehensive Investment Incentives L. Law 5084: Withholding of Income Tax on Wages and Salaries M. Exemption from Property Tax N. Law 5084: Incentive for Employer’s Share in Insurance Premiums O. Support for Energy Payments

Alleged sales at LTFV

On February 20, 2018, Commerce published a notice in the Federal Register of the initiation of its antidumping duty investigations on LDWP from Canada, Greece, China, India, Korea, and Turkey.16 Commerce has initiated antidumping duty investigations based on estimated dumping margins of 50.89 percent from Canada; 120.84 to 132.63 percent from China; 41.04 percent from Greece; 37.94 percent from India; 16.18 and 20.39 percent from Korea; and 66.09 percent from Turkey.

15 Large Diameter Welded Pipe from the Republic of Turkey, Enforcement and Compliance Office of AD/CVD Operations Countervailing Duty Investigation Initiation Checklist, February 9, 2018.

16 Large Diameter Welded Pipe From Canada, Greece, India, People's Republic of China, Republic of Korea, and Republic of Turkey, 83 FR 7154, February 20, 2018.

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THE SUBJECT MERCHANDISE Commerce’s scope

In the current proceeding, Commerce has defined the scope as follows:

Large diameter welded pipe covered by these investigations is welded carbon and alloy steel pipe, more than 406.4 mm (16 inches) in nominal outside diameter (large diameter welded pipe), regardless of wall thickness, length, surface finish, grade, end finish, or stenciling. Large diameter welded pipe may be used to transport oil, gas, slurry, steam, or other fluids, liquids, or gases. It may also be used for structural purposes, including, but not limited to, piling. Specifically, not included is large diameter welded pipe produced only to specifications of the American Water Works Association (AWWA) for water and sewage pipe. Large diameter welded pipe used to transport oil, gas, or natural gas liquids is normally produced to the American Petroleum Institute (API) specification 5L. Large diameter welded pipe may also be produced to American Society for Testing and Materials (ASTM) standards A500, A252, or A53, or other relevant domestic specifications, grades and/or standards. Largediameter welded pipe can be produced to comparable foreign specifications, grades and/or standards or to proprietary specifications, grades and/or standards, or can be non-graded material. All pipe meeting the physical description set forth above is covered by the scope of these investigations, whether or not produced according to a particular standard. Subject merchandise also includes large diameter welded pipe that has been further processed in a third country, including but not limited to coating, painting, notching, beveling, cutting, punching, welding, or any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the in-scope large diameter welded pipe. Excluded from the scope are any products covered by the existing antidumping duty orders on welded line pipe from the Republic of Korea, welded line pipe from the Republic of Turkey, and welded ASTM A–312 stainless steel pipe from Korea, as well as any products covered by the existing countervailing duty order on welded line pipe from Turkey. See Welded Line Pipe from the Republic of Korea and the Republic of Turkey: Antidumping Duty Orders, 80 FR 75056 (December 1, 2015); Welded ASTM A– 312 Stainless Steel Pipe from South Korea: Antidumping Duty Order, 57 FR 62300 (December 30, 1992); and Welded Line Pipe from the Republic of Turkey: Countervailing Duty Order, 80 FR 75054 (December 1, 2015).

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The large diameter welded pipe that is subject to these investigations is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 and 7305.39.5000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive.17

Tariff treatment

Based upon the scope set forth by the Department of Commerce, information available to the Commission indicates that the merchandise subject to these investigations are currently imported under the following provisions of the Harmonized Tariff Schedule of the United States (“HTS”): 7305.11.10, 7305.11.50, 7305.12.10, 7305.12.50, 7305.19.10, 7305.19.50, 7305.31.40, 7305.31.60, 7305.39.10, and 7305.39.50. The 2018 general rate of duty is free for each of the relevant HTS subheadings. Decisions on the tariff classification and treatment of imported goods are within the authority of U.S. Customs and Border Protection.

THE PRODUCT

Description and applications

Welded pipe18 is classified as a long-rolled steel pipe product that can be produced in sizes from 1/8 inch to over 80 inches in outside diameter (O.D.). Line pipe is used for the gathering, transmission, and distribution of oil and gas, generally in a pipeline or utility distribution system (figure I-1). Line pipe can be produced with plain ends, threaded, beveled, grooved, flanged or expanded, depending on the requirements.19 Figure I-2 is a visual depiction of welded line pipe.

17 Large Diameter Welded Pipe from Canada, China, Greece, India, Korea, and Turkey; Initiation of Less-Than-Fair-Value Investigations. 83 FR 7161, February 2018.

18 The terms “pipes” and “tubes” are interchangeable in common usage and are not separately provided for in the HTS. However, tubular product manufacturers typically categorize “pipes” as having a circular cross-section in a few standard sizes, whereas “tubes” may have any cross-sectional shape (circular, square, rectangular or others). Steel pipes can be manufactured in either a welded or seamless process. Steel pipes can be further subdivided according to the grades of steel (carbon, alloy, and stainless). Moreover, the American Iron and Steel Institute (AISI) further categorizes steel pipes and tubes by six-end uses: line pipe, standard pipe, structural pipe and tubing, mechanical tubing, pressure tubing and oil country tubular goods.

19 Mohinder L. Nayyar, Piping Handbook, Seventh Edition, 2000, pp. C-238-230.

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Figure I-1: Example of an oil and natural gas pipeline system

Source: U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration, http://primis.phmsa.dot.gov, accessed January 24, 2018. Figure I-2: Certain welded line pipe: Welded API line pipe

Source: http://www.apisteel.com/api-5l-x42-steel-line-pipe-813/, accessed February 1, 2018.

http://primis.phmsa.dot.gov/

http://www.apisteel.com/api-5l-x42-steel-line-pipe-813/

I-15

Structural pipe and tubing is used as structural support or for load-bearing purposes. Structural pipe may be used in: piling, structural supports, sign poles, bollards, columns, and fencing.20 The line pipe subject to these investigations is a welded circular pipe product, having an O.D. more than 16 inches (406.4 millimeters), regardless of wall thickness, length, surface finish, or end finish.21 Line pipe can be produced from carbon or alloy steel. Carbon steel contains controlled amounts of carbon and manganese. Alloy steels, which provide physical properties not achievable to the same degree with carbon steels, contain controlled amounts of alloying elements, usually nickel, chromium, and molybdenum.22 Line pipe is generally produced in the United States in lengths of 40 feet or greater,23 and with either a bare finish or a black (lacquered) finish to protect the pipe from rusting, which is especially important for storage in humid climates or for waterborne transportation. End finishes typically include square cut or beveled for welding in the field.24

The subject product includes welded line pipe used in oil and gas pipelines for the gathering and transmission of oil and gas. Gathering25 is an upstream application in which welded line pipe is used to move the natural gas out of the fields and into the processing plant, or to gather crude oil for further processing in oil refineries.26 Smaller O.D. line pipe ranging from 2 to 8 inches27 traditionally has been used in standard gathering applications for the oil and gas industries;28 however O.D. sizes of line pipe for gathering applications have been

20 “Structural Pipe,” CBI Pipe and Supply, http://www.cbipipe.com/structural-pipe/, accessed February 12, 2018.

21 Although the scope of these investigations does not take into account wall thickness, API 5L specifications have thickness requirements.

22 The distinguishing characteristics of alloy steel pipe are its physical properties, which make the alloy steel pipe suitable for application in high-temperature or low-temperature service. Certain Welded Line Pipe from Korea and Turkey, Investigation Nos. 701-TA-525 and 731-TA-1260-1261 (Final), USITC Publication 4580, November 2015, p. I-15.

23 Nominal 40-45 foot lengths are referred to by the industry as “double random lengths” or “DRL.” 24 ASTM International, “A53/A53M-12: Standard Specification for Pipe, Steel, Black and Hot-Dipped,

Zinc-Coated, Welded, and Seamless,” Annual Book of ASTM Standards, Section One, Iron and Steel Products, Volume 01.01, 2017, pp. 6-7.

25 Gathering applications for natural gas consist of individual gas wells connected to field gas treatment facilities and processing facilities, or to branches of a larger gathering system. The Interstate Natural Gas Association of America, “America’s Natural Gas Pipeline Network: Delivering Clean Energy for the Future,” 2009, pp. 106-107.

26 Havard Devold, “Oil and gas production handbook: An introduction to oil and gas production, transport, refining and petrochemical industry,” 2013, p. 59.

27 Before the increased drilling activity in shale gas regions, line pipe used for gathering applications in the natural gas industry was generally smaller in diameter than those used in the oil industry. Association of Oil Pipelines, Pipelines 101, How Do Pipelines Work?, http://www.pipeline101.com/how-do-pipelines-work, retrieved on February 1, 2018.

28 In the past, line gathering pipelines were built in minimally populated areas and used smaller-diameter line pipe that operated at lower pressures. U.S. Department of Transportation, Pipeline and

(continued...)

http://www.cbipipe.com/structural-pipe/

http://www.pipeline101.com/how-do-pipelines-work

http://www.pipeline101.com/how-do-pipelines-work

I-16

increasing in recent years due to extensive shale gas development.29 More specifically welded line pipe in diameter sizes up to 24 inches30 has become more common in gathering applications for pad drilling31 in shale gas regions.32

Transmission33 of oil and gas is a midstream application in which welded line pipe is used to move oil and gas to any type of collection or distribution point.34 Line pipe used in transmission applications has larger O.D. sizes than that used in gathering applications because refined oil or natural gas often has to move over long distances and even across national or international boundaries to reach distribution channels. Line pipe diameter sizes used in the transmission of oil and gas can vary greatly, although line pipe used in standard transmission applications for natural gas is traditionally larger (O.D. between 30 and 36 inches) than those used for oil (O.D. between 8 and 24 inches).35

(…continued) Hazardous Materials Safety Administration, Gathering Pipelines: Frequently Asked Questions, https://www.phmsa.dot.gov/faqs/gathering-pipelines-faqs, retrieved on February 1, 2018.

29 Paul W. Parfomak, “Shale Gas Gathering Pipelines: Safety Issues,” August 1, 2014, http://fas.org/sgp/crs/misc/IN10123.pdf, retrieved on February 1, 2018.

30 ***. 31 Pad drilling is the practice of drilling multiple entry points into oil wells from a single surface

location, as opposed to drilling a single well. U.S. Energy Information Administration, “Pad Drilling and Rig Mobility Lead to More Efficient Drilling,” September 11, 2012, http://www.eia.gov/todayinenergy/detail.cfm?id=7910, retrieved on February 1, 2018.

32 Line pipe used in the various shale plays like Marcellus, Utica, Barnett, and Bakken is generally of much larger diameter than traditional gas gathering pipelines. U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration, Gathering Pipelines: Frequently Asked Questions, https://www.phmsa.dot.gov/faqs/gathering-pipelines-faqs, retrieved on February 1, 2018.

33 Transmission lines are also known as “trunk lines.” Transmission of natural gas occurs from the principal supply areas to distribution centers, large volume customers or other transmission lines. The transmission pipelines for the oil consists of two types of transmission lines: 1) crude oil transmission lines, which travel long-distance from crude oil storage and treatment tanks to oil refineries, and 2) refined products transmission lines, which refined oil to a distribution center after impurities are removed in the oil refineries. The Interstate Natural Gas Association of America, America’s Natural Gas Pipeline Network: Delivering Clean Energy for the Future, 2009, pp. 128; American Petroleum Institute, Standards, http://www.api.org/products-and-services/standards, retrieved on February 8, 2018; and U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration, Petroleum Pipeline Systems, https://primis.phmsa.dot.gov/comm/PetroleumPipelineSystems.htm, retrieved on January 24, 2018.

34 Certain Welded Line Pipe from Korea and Turkey, Investigation Nos. 701-TA-525 and 731-TA-1260-1261 (Final), USITC Publication 4580, November 2015, p. I-16; and U.S. Steel Tubular Products’ website, Standard and Line Steel Pipe, http://usstubular.com/standard-and-line-steel-pipe, retrieved on February 1, 2018.

35 The Trans-Alaska Pipeline System is unique because it uses 48-inch diameter line pipe, which is the largest diameter line pipe used in the United States for transmission of oil. U.S. Department of Energy, Argonne National Laboratory, Natural Gas Pipeline Technology Overview,

(continued...)

https://www.phmsa.dot.gov/faqs/gathering-pipelines-faqs

http://fas.org/sgp/crs/misc/IN10123.pdf

http://www.eia.gov/todayinenergy/detail.cfm?id=7910

https://www.phmsa.dot.gov/faqs/gathering-pipelines-faqs

http://www.api.org/products-and-services/standards

https://primis.phmsa.dot.gov/comm/PetroleumPipelineSystems.htm

http://usstubular.com/standard-and-line-steel-pipe

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Subject line pipe is normally produced in conformance with the American Petroleum Institute’s (“API”) 5L specifications, which provides standards for “pipe suitable for use in conveying gas, water, and oil in both the oil and gas industries.”36 The subject product generally bears an API line pipe stencil.37 The API 5L specification for line pipe indicates the marking and class (e.g. A-25, A, B, and X-42 through X-80), process of manufacture (electric resistance welded pipe38 or submerged arc welded pipe39), product specification levels (PSL 1 and PSL 2), heat treatment, and test pressure. The API 5L grades define the yield (tensile) strength level of the pipe and of the steel used to make the pipe.

The API 5L specification also suggests that “products in compliance with multiple compatible standards may be marked with the name of each standard.” Thus, line pipe can bear multiple stencils, signifying compliance with one or more certifications (such as grade B/ X-42), as well as standard pipe,40 piling,41 or structural42 pipe certifications. (…continued) http://corridoreis.anl.gov/documents/docs/technical/apt_61034_evs_tm_08_5.pdf, retrieved on February 2, 2018 ; U.S. Department of Energy, Argonne National Laboratory, Overview of the Design, Construction and Operation of Interstate Liquid Petroleum Pipelines, http://corridoreis.anl.gov/documents/docs/technical/apt_60928_evs_tm_08_1.pdf, retrieved on February 2, 2018.

36 The API 5L specification covers both seamless and welded steel line pipe. Although seamless pipe is covered by the API 5L specification, it is outside the scope of these investigations. American Petroleum Institute, API Specification 5L, 45th Edition, December 2012.

37 A “stencil” is information marked by the manufacturer with paint stenciled on the outside of the pipe indicating the specification in conformance with which it has been manufactured. However, the purchaser and manufacturer can agree to put all or part of the markings on the inside of the pipe. Pipe O.D. 1-1/2 inches and smaller has identification markings die-stamped on a metal tag fixed to the bundle or printed on the straps or binding clips used to tie the bundle.

38 An electric resistance weld is a process where the strip edges are mechanically pressed together and welded. The heat for welding is generated by resistance of the steel to the flow of an electric current. In one process, a low-frequency (typically 60 to 360 hertz) current is conducted to the strip edges by a pair of copper alloy discs which rotate as the pipe is propelled under them. A second variation uses high-frequency (in the range of 400 to 500 kilohertz) which enters the tubing through shoes which act as sliding contacts. An induction coil can also be used with the high frequency current to induce current in the edges of the steel. No direct contact between the induction coil and tubing is required. American Petroleum Institute, API Specification 5L, 44th Edition, October 2008.

39 The submerged arc weld process is a welding process that produces coalescence of metals by heating them with an arc or arcs between a bare metal consumable electrode or electrodes and the work. The arc and molten metal are shielded by a blanket of granular, fusible material on the work. Pressure is not used and part or all of the filler metal is obtained from the electrodes, API Specification 5L, 43rd Edition, October 2004.

40 Because welded line pipe for use in oil and gas pipelines requires higher hydrostatic test pressures and more restrictive weight tolerances than standard pipe, pipe that is in conformance with API Specification 5L Grade B is automatically in conformance with the less restrictive standard pipe specification of the American Society for Testing Materials, ASTM A-53, Grade B. ASTM A-53, Grade B covers both welded and seamless pipe with a minimum tensile strength of 60,000 psi and minimum yield strength of 35,000 psi. The weld seam for ERW line pipe meeting ASTM A-53, Grade B

(continued...)

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Structural pipe is generally used for structural or load-bearing purposes above ground by the construction industry, as well as for structural members in ships, trailers, farm equipment, or other similar uses. It is produced in nominal wall thicknesses and sizes to American Society for Testing and Materials (“ASTM”) specifications, such as A53, A252, or A500.

ASTM A53 consists of welded or seamless pipe designed for use in mechanical and pressure applications, but may be suitable for welding and forming operations, such as: coiling, bending, and flanging.43 ASTM A252 is a specification for welded or seamless pipe for use as pipe piles used for load-bearing purposes or as a shell to form cast-in-place concrete piles.44 ASTM A500 is a specification for cold-formed welded or seamless carbon steel structural tubing utilized in the construction of bridges, buildings, or other structures.45

Manufacturing processes

Welded pipe is most commonly manufactured by either the electric resistance weld (“ERW”) process or the submerged arc welding process (“SAW”). SAW encompasses both helical (spiral) welding (“HSAW”) and longitudinal welding (“LSAW”). The API 5L specification permits both ERW and SAW processes in all grades and classes of line pipe.46 The ERW manufacturing process is the least expensive production method, and the LSAW manufacturing process is the most expensive manufacturing method for producing welded pipe.47 Line pipe produced by LSAW is used for transporting oil and gas, either onshore or offshore, while ERW- and HSAW-produced line pipe are used for transporting oil and gas onshore. The ERW method cannot produce welded line pipe with a very heavy wall thickness, and therefore is not favored

(…continued) specifications must be heat-treated after welding. Annual Book of ASTM Standards, Section One, Iron and Steel Products, Volume 01.01, 2017, pp. 1-23.

41 ASTM A-252, Grade 3 covers welded and seamless steel pipe for piling application or permanent load carrying member with minimum yield strength of 45,000 psi. Annual Book of ASTM Standards, Section One, Iron and Steel Products, Volume 01.01, 2017, pp. 153-159.

42 ASTM A-500, Grade C covers cold-formed welded and seamless carbon round, square, rectangular, or special shape structural tubing for general structural with a minimum yield strength of 50,000 psi. Annual Book of ASTM Standards, Section One, Iron and Steel Products, Volume 01.01, 2017, pp. 373-377.

43 ASTM International, “A53/A53M-12: Standard Specification for Pipe, Steel, Black and Hot-Dipped, Zinc-Coated, Welded, and Seamless,” Annual Book of ASTM Standards, Section One, Iron and Steel Products, Volume 01.01, 2017, pp. 1-23.

44 ASTM International, “A252-10: Standard Specification for Welded and Seamless Steel Pipe Piles,” Annual Book of ASTM Standards, Section One, Iron and Steel Products, Volume 01.01, 2017, pp. 153-159.

45 ASTM International, “A500/A500M-13: Standard Specification for Cold-Formed Welded and Seamless Carbon Steel Structural Tubing in Rounds and Shapes,” Annual Book of ASTM Standards, Section One, Iron and Steel Products, Volume 01.01, 2017, pp. 373-377.

46 American Petroleum Institute, API Specification 5L, 45th Edition, December 2012. 47 Certain Welded Line Pipe from Korea and Turkey, Investigation Nos. 701-TA-525 and 731-TA-1260-

1261 (Final), USITC Publication 4580, November 2015, pp. I-19-24.

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for offshore or deep-water applications where a heavier internal pressure is needed to move crude oil or gas through the pipeline.48

Welded-pipe manufactured using the HSAW and ERW methods are produced from steel sheet in coils in a continuous forming process. 49 By contrast, LSAW pipe requires piece-by-piece production from thicker steel plates, and is used in more demanding applications.50 Unlike the ERW and LSAW methods, the HSAW process offers the advantage of producing pipe with diameters larger than the width of the coiled steel input because of its helical wrap during the forming process of the cylindrical hollow body. The ERW process is limited by the width of the available steel coils and suitable for thinner-walled and small-diameter pipes, and is used to produce pipe with a maximum O.D. of 24 inches, maximum length of 80 feet, and a maximum pipe wall thickness of 0.75 inches. The LSAW method of production can produce line pipe with a maximum O.D. of 120 inches, and maximum length of 40 feet, and a maximum pipe wall thickness of 1.5 inches. 51 According to U.S. producer questionnaire responses, *** percent of subject pipe of O.D. 24 inches or less is manufactured using the ERW or HSAW method in the United States.52 Pipe of O.D. 24 inches or less can be manufactured by the LSAW method, but it tends to be cost-prohibitive.53 Table I-2 presents a summary of the differences among ERW, LSAW, and HSAW pipe production.

48 Conference transcript, p. 160 (Papavasileiou). 49 A continuous forming process is completed in one step versus the multi-step, piece-by-piece

production of LSAW. 50 Seamless line pipe is primarily used for high pressure applications, including offshore use. TMK

IPSCO website, Line Pipe, https://tmk-ipsco.tmk-group.com/tmk_ipsco_line_pipe, Accessed January 30, 2018.

51 Mohinder L. Nayyar, “Piping Handbook,” Seventh Edition, 2000, pp. C-218. 52 According to U.S. producer responses, *** of subject line pipe of O.D. 24 inches or less is produced

using the LSAW method in the United States. Compiled from U.S. producer questionnaire responses, Question II-10.

53 Certain Welded Line Pipe from Korea and Turkey, Investigation Nos. 701-TA-525 and 731-TA-1260-1261 (Final), USITC Publication 4580, November 2015, pp. I-19-24.

https://tmk-ipsco.tmk-group.com/tmk_ipsco_line_pipe

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Table I-2 Large diameter welded pipe: Production differences by manufacturing process

Manufacturing method

Maximum outside

diameter (inches)

Maximum length (feet)

Production method cost

ruling

Maximum pipe wall thickness

(inches) Electric Resistance Weld

24- domestic 26 - foreign 80 Least expensive 0.63

Longitudinal Submerged Arc Welding 120 40 Most expensive 1.25 Helical (Spiral) Submerged Arc Welding 157 80 1.03

Source: Certain Welded Large Diameter Line Pipe from Japan, Investigation No. 731-TA-919 (Second Review), USITC Publication 4427, September 2013, p. I-18; Petitioner’s postconference brief, exhibit 17; and Conference transcript, p. 160 (Papavasileiou). ERW manufacturing method

ERW is the dominant manufacturing method for producing welded line pipe with O.D. up to 24 inches; and virtually all U.S. producers manufacturing such line pipe use the ERW method.54 The ERW manufacturing process begins with coils of hot-rolled sheet steel, which are cut by a slitting machine into strips of the precise width needed to produce a desired diameter of pipe.55 The slit coils are fed into tube mills, which cold-form the flat ribbon of steel into a tubular cylinder by a series of tapered forming rolls. The product is then welded along the joint axis by heat obtained from the pipe’s resistance to the flow of electric current. The welded tube next passes under a tool that removes the outside flash (the metal extruded by the weld process) resulting from pressure during the welding. Inside flash is likewise removed by cutting tools. The tube is then subjected to such post-weld heat treatment as is required, and may involve heat treatment of the welded seam only or treatment of the full cross-section of the pipe. After heat treatment, sizing rolls shape the tube to specific diameter tolerances. The product is then cooled and cut to length at the end of the tube mill (figure I-3).

54 Compiled from U.S. producer questionnaire responses, Question II-10. 55 The required diameter and wall thickness of a pipe are a function of the intended volume and pressure of material that is to flow through the pipe.

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Figure I-3 Large diameter welded pipe: electric resistance welding manufacturing process

Source: Sunny Steel Enterprise Ltd., ERW Manufacturing Process, http://www.sunnysteel.com/erw-pipe-processes.php#.VE5ySk10yic, accessed January 30, 2018. HSAW manufacturing method

Like ERW, the HSAW manufacturing method uses coiled hot-rolled steel strip as the starting material for formation of pipes. The coiled steel strip is loaded on a decoiler and the strip is straightened and edges are milled to the desired joint configuration. The steel strip is guided into a forming station where it produces a cylinder hollowed body which is then welded-spirally, like a helix, so that the coil strip assumes the shape of the pipe at a predetermined forming angle. Inside and outside welding is performed by an automatic submerged arc process. HSAW line pipe is not limited by coil width because of the helical wrap of the steel, and is generally used for larger-diameter pipe projects in the United States. The HSAW method of production can produce line pipe with a maximum O.D. of 157 inches, a maximum length of 80

http://www.sunnysteel.com/erw-pipe-processes.php#.VE5ySk10yic

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feet, and a maximum pipe wall thickness of 1.03 inches.56 Figure I-4 depicts the HSAW manufacturing process for welded line pipes. Figure I-4: Large diameter welded pipe: helical (spiral) submerged arc weld manufacturing process

Source: Berg Spiral Pipe, Stages of HSAW Pipe Production, www.bergpipe.com/files/production-process-bspm.pdf, accessed January 30, 2018. LSAW manufacturing method

Unlike the ERW and HSAW manufacturing methods, which begin with steel coils, the LSAW method produces line pipe from cut-to-length steel plates. Each individual plate proceeds through various steps including (a) shearing and edge planing to ensure that the plate is flat and aligned so that the two edges of the steel plate are parallel and square with the ends and (b) crimping or bending of the plate edges to avoid a flat surface along the seam of the pipe and (c) bending the plate to the desired form. The two primary methods of shaping line pipe in the LSAW process are the pyramid rolling 57and the U-O-E methods.58 Figure I-5 visually depicts the LSAW manufacturing process for welded line pipes.


57 The pyramid rolling machine consists of an elongated three-roll bending apparatus with the two bottom rolls fixed and the top roll movable along a vertical plane. The steel plate moves into position beneath the top roll and, through the proper combination of force and counter pressure, is shaped into a cylinder around the top roll. The edges of the pipe are formed by a continuous crimping machine, which prepares the edges for welding. When this is accomplished, the pipe is welded along the joint axis. Finally, the pipe is sized to ensure that it meets specifications on roundness and diameter at the ends. The sizing machine consists of a top and bottom roll shaped to the desired configuration of the

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Figure I-5: Large diameter welded pipe: longitudinal submerged arc weld manufacturing process

Source: Sunny Steel Enterprise Ltd., LSAW Manufacturing Process, http://www.sunnysteel.com/lsaw-flow.php#.VgACuU2FOic. Accessed January 30, 2018. Testing and finishing stage

The sizing, testing and finishing stage is similar in the ERW, LSAW, and HSAW manufacturing methods. Line pipe may be subject to various tests including hydrostatic testing

(…continued) pipe. Pressure is applied on the top roll to exert a force on the pipe as it passes between the rolls. Certain Welded Line Pipe from Korea and Turkey, Investigation Nos. 701-TA-525 and 731-TA-1260-1261 (Final), USITC Publication 4580, November 2015, pp. I-19-24.

58 In the U-O-E method, the plate is crimped by bending the edges upward; it then enters the U-press, where a die bends it into a “U” shape. Next, the “U” enters the O-press, where the walls of the “U”-shaped channel are forced together, resulting in an “O”-shaped pipe. The pipe is then welded along the joint axis. In order to round the pipe and to ensure proper yield strength (which may be reduced in the O-press), two methods of expansion can be used, mechanical or hydraulic. In the mechanical expander, the pipe is moved over a head mechanism with symmetrical segments that can exert force on the inside of the pipe, thereby causing it to expand. In the hydraulic expander, the pipe is closed at both ends, filled with water and then pressurized. Under high pressure, the pipe expands to fill outside dies of the desired size. The pipe is then tested and inspected. LSAW pipe is welded with an electric arc that heats the metal edges and a consumable electrode or electrodes which provide the filler metal. The weld is blanketed by a shield of granular, fusible flux to protect the hot weld from chemically reacting with the surrounding air. Pipes usually are welded on both the outside and the inside of the same seam. Following the welding process, the scaly deposit left from the flux must be scraped away and the pipe cleaned. The weld is then inspected to correct any defects. Specific heat treatments can be performed to achieve the desired physical properties for the weld section. Certain Welded Line Pipe from Korea and Turkey, Investigation Nos. 701-TA-525 and 731-TA-1260-1261 (Final), USITC Publication 4580, November 2015, pp. I-19-24.

http://www.sunnysteel.com/lsaw-flow.php#.VgACuU2FOic

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and X-ray examination of the weld in order to detect any defects, and if necessary, would undergo finishing of the pipe ends including beveling.59

DOMESTIC LIKE PRODUCT ISSUES

Petitioners contend that the Commission should find a single domestic like product, coextensive with Commerce’s scope.60

EVRAZ Inc. advances the argument that the Commission to find three separate like products, citing distinctions between ERW line pipe, SAW line pipe, and structural pipe.61 Specifically, they assert that LDWP are resistant to highly corrosive “sour” environments which requires a refining process in the production of the steel to increase the purity of the steel, thereby making it more resistant to corrosion from sour gas and the made to API 5L specifications. 62 In contrast, structure pipes are made to ASTM specification and are used for construction of pumping stations, road-crossings, power plants, and load-bearing purposes.63 Furthermore, they argue that structural pipes are not used as a substitute for LDWP.

Respondents Borusan and CPW assert that the Commission should find LDWP and structural pipe are separate like products because they have different end uses, customers, manufacturing standards and specifications, and different pricing.64 65


60 Petitioners’ postconference brief, p. 3 and exhibit 1. 61 EVRAZ Inc.’s postconference brief, p. 41. 62 Ibid. 63 Ibid, p. 42. 64 CPW’s postconference brief, p. 12. 65 Borusan, pp. 2-10.

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PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

LDWP is used for the conveyance of gas, oil, and other liquids, generally in a pipeline or utility distribution system.1 LDWP may also be used in structural applications, the most common of which is piling. LDWP used to convey oil or gas is generally produced to an American Petroleum Institute ("API") standard and LDWP used in structural applications is produced to the American Society for Testing and Materials ("ASTM") specifications. LDWP is generally sold to end users for specific projects, such as pipelines for energy applications and for structural applications (e.g., bridges, stadiums, and deep water ports).2

Apparent U.S. consumption of LDWP decreased by 28.9 percent from 2015 to 2016 and then increased by 3.5 percent from 2016 to 2017. Overall, apparent U.S. consumption in 2017 was 26.5 percent lower than in 2015.

CHANNELS OF DISTRIBUTION

U.S. producers sold mainly to end users. Imports of LDWP from Canada, Greece, India, and nonsubject countries were *** sold to end users during 2015‐17 (table II‐1). Imports of LDWP from China were sold *** to distributors in 2015 and then were sold *** to end users during 2016‐17. Imports of LDWP from Korea were sold *** to distributors during 2015‐17 while imports of LDWP from Turkey were sold *** to distributors in 2015 and 2017.

1 Petition, vol. 1, p. 8. 2 Petitioners estimated that nearly 100 percent of LDWP purchased for energy‐related applications

and approximately 90 percent of LDWP purchased for structural applications is produced‐to‐order for specific projects. Conference transcript, p. 103 (Kaplan). Petitioners reported that in some cases, distributors act as purchasing agents for end users, such that sales to a distributor may in fact be for a discrete project. Petition, vol. 1, p. 16.

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Table II-1 LDWP: U.S. producers’ and importers’ U.S. commercial shipments, by sources and channels of distribution, 2015-17

Item

Period Calendar year

2015 2016 2017 Share of reported shipments (percent) U.S. producers’ U.S. commercial shipments of LDWP: Distributors 13.3 10.5 20.6 End users 86.7 89.5 79.4 U.S. importers’ U.S. commercial shipments of LDWP from Canada: Distributors *** *** *** End users *** *** *** U.S. importers’ U.S. commercial shipments of LDWP from China: Distributors *** *** *** End users *** *** *** U.S. importers’ U.S. commercial shipments of LDWP from Greece: Distributors *** *** *** End users *** *** *** U.S. importers’ U.S. commercial shipments of LDWP from India: Distributors *** *** *** End users *** *** *** U.S. importers’ U.S. commercial shipments of LDWP from Korea Distributors *** *** *** End users *** *** *** U.S. importers’ U.S. commercial shipments of LDWP from Turkey: Distributors *** *** *** End users *** *** *** U.S. importers’ U.S. commercial shipments of LDWP from all other countries: Distributors *** *** *** End users *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

GEOGRAPHIC DISTRIBUTION

More than half of responding U.S. producers reported selling LDWP to all regions in the contiguous United States; most U.S. producers reported selling to the Northeast, Midwest, Southeast, and Central Southwest (table II‐2). More than half of the 17 responding importers reported selling to Central Southwest and Pacific Coast. While importers sold LDWP throughout the United States, only one importer of subject merchandise from Korea reported serving the entire contiguous United States. For U.S. producers, 8.7 percent of sales were within 100 miles of their production facility, 70.0 percent were between 101 and 1,000 miles, and 21.3 percent were over 1,000 miles. Importers sold 46.3 percent within 100 miles of their U.S. point of shipment, 48.8 percent between 101 and 1,000 miles, and 4.9 percent over 1,000 miles.

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Table II-2 LDWP: Geographic market areas in the United States served by U.S. producers and importers

Region U.S.

producers Canada China Greece India Korea Turkey Subject U.S.

importers Northeast 9 *** 1 *** 1 1 1 6 Midwest 10 *** --- *** 1 3 --- 5 Southeast 9 *** 1 *** 2 3 2 7 Central Southwest 10 *** 4 *** 3 8 1 14 Mountain 6 *** 1 *** 1 2 --- 4 Pacific Coast 9 *** 5 *** --- 3 --- 8 Other1 2 *** 1 *** --- 1 --- 2 All regions (except Other) 6 *** --- *** --- 1 --- 1 Reporting firms 11 1 7 1 3 9 3 17

1 All other U.S. markets, including AK, HI, PR, and VI. Source: Compiled from data submitted in response to Commission questionnaires.

SUPPLY AND DEMAND CONSIDERATIONS

U.S. supply

Twelve U.S. producers3 and importers of LDWP from Canada, China, Greece, India, Korea, Turkey, and nonsubject countries supply the U.S. market. A summary of supply factors for U.S. and subject foreign producers are presented in table II‐3. Table II-3 LDWP: Factors that affect ability to increase shipments to the U.S. market, by country

Item

Capacity (short tons)

Capacity utilization (percent)

Inventories as a ratio to

total shipments (percent)

Ability to shift

to alternate product (number of firms)

Home market

shipments as a share

of total shipments

in 2017 (percent)

Shipments exported to non-

U.S. markets in

2017 (percent) 2015 2017 2015 2017 2015 2017

United States 3,808,024 3,760,155 51.3 32.4 14.3 10.9 4 98.5 1.5 Canada *** *** *** *** *** *** 0 *** *** China *** *** *** *** *** *** 0 *** *** Greece *** *** *** *** *** *** 1 *** *** India *** *** *** *** *** *** 0 *** *** Korea *** *** *** *** *** *** 0 *** *** Turkey *** *** *** *** *** *** 2 *** *** Source: Compiled from data submitted in response to Commission questionnaires.

3 As discussed in Part I, eleven firms provided usable data on their production activities which are presented in table II‐3. One U.S. producer (***) submitted an unusable U.S. producer questionnaire response.

II‐4

Domestic production Based on available information, U.S. producers of LDWP have the ability to respond to

changes in demand with large changes in the quantity of shipments of U.S.‐produced LDWP to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the overall large capacity, the availability of unused capacity, and the ability to shift production to or from alternate products. Factors mitigating responsiveness of supply include limited inventories.

Domestic capacity utilization decreased during 2015‐17 as a result of decreased production. This relatively low level of capacity utilization suggests that U.S. producers may have substantial ability to increase production of LDWP in response to an increase in prices. U.S. producers’ inventories declined. U.S. producers reported that the majority of their commercial shipments were produced‐to‐order. U.S. producers’ exports, as a percentage of total shipments, increased slightly during 2015‐17. ***. U.S. producers stated that it would be difficult to shift their shipments to other markets. U.S. producer Berg Pipe stated that tariff barriers to trade in other markets, specifically in China, Mexico, Russia, and Canada limited its ability to export.4 Four of 11 responding U.S. producers stated that they could switch production from LDWP to other products. Other products that U.S. producers reportedly can produce on the same equipment as LDWP are line pipe up to 16 inches in diameter, water pipe, HSS (structural tube) and structural piling. Subject imports from Canada5

Based on available information, Evraz has the ability to respond to changes in demand

with moderately large changes in the quantity of shipments of LDWP to the U.S. market. The main contributing factor to this degree of responsiveness of supply is the availability of unused capacity. Factors mitigating responsiveness of supply include limited inventories, limited ability to shift shipments from alternate markets, and limited ability to shift production to or from alternate products.

Evraz’s capacity utilization decreased during 2015‐17 ***. The Canadian producer’s inventories, as a ratio to total shipments, increased slightly during 2015‐17. Evraz sold LDWP ***. Evraz reported that ***. Subject imports from China6

Based on available information, Chinese producers of LDWP have the ability to respond

to changes in demand with large changes in the quantity of shipments of LDWP to the U.S.

4 Conference transcript, pp. 65‐66 (Riemer). 5 One producer in Canada, Evraz, responded to the Commission’s questionnaire. According to

estimates, it accounts for approximately *** percent of exports of LDWP to the United States from Canada.

6 No questionnaire responses were received from Chinese producers.

II‐5

market. The main contributing factors to this degree of responsiveness of supply are the availability of large amounts of unused capacity and the ability to shift shipments from alternate markets. It is estimated that China accounted for approximately 70 percent of all global welded tube production in 2015.7 No information was available regarding inventories or ability to shift production to or from alternate products. Subject imports from Greece8

Based on available information, Corinth has the ability to respond to changes in demand

with large changes in the quantity of shipments of LDWP to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the availability of unused capacity, the ability to shift shipments from alternate markets, and the ability to shift production to or from alternate products. Factors mitigating responsiveness of supply include limited inventories.

Corinth’s capacity utilization increased during 2015‐17 ***; its capacity *** during 2015‐17. The Greek producer’s inventories, as a ratio to total shipments, decreased *** from 2015 to 2017. Corinth’s exports to other markets increased during 2015‐17 as its exports to the U.S. market decreased. Corinth reported that ***. Subject imports from India9

Based on available information, Welspun has the ability to respond to changes in

demand with large changes in the quantity of shipments of LDWP to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the availability of unused capacity and the ability to shift production to or from alternate products. Factors mitigating responsiveness of supply include limited inventories and limited ability to shift production to or from alternate products.

Welspun’s capacity utilization increased during 2015‐17 ***. Its inventories, as a ratio to total shipments, decreased *** from 2015 to 2017. The share of shipments to Welspun’s home market decreased over the period while its share of shipments to export markets increased. Welspun reported ***.

7 World Steel Association, Steel Statistical Yearbook, November 2017, table 28. p. 52. 8 One producer in Greece, Corinth, responded to the Commission’s questionnaire. According to

estimates, it accounts for approximately *** percent of exports of LDWP to the United States from Greece.

9 One producer in India, Welspun, responded to the Commission’s questionnaire. According to estimates, it accounts for approximately *** percent of exports of LDWP to the United States from India

II‐6

Subject imports from Korea10 Based on available information, EEW has the ability to respond to changes in demand

with moderately large changes in the quantity of shipments of LDWP to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the ability to shift shipments from alternate markets, some inventories, and some amounts of unused capacity. Factors mitigating responsiveness of supply include the limited ability to shift production to or from alternate products.

EEW’s capacity utilization increased during 2015‐17 ***. EEW’s inventories, as a ratio to total shipments, fluctuated during the period but decreased overall from 2015 to 2017. EEW exported LDWP ***. EEW reported that ***. Subject imports from Turkey11

Based on available information, Turkish producers have the ability to respond to

changes in demand with large changes in the quantity of shipments of LDWP to the U.S. market. The main contributing factors to this degree of responsiveness of supply are large amounts of unused capacity, the ability to shift shipments from alternate markets, and some ability to shift production to or from alternate products. Factors mitigating responsiveness of supply include the limited inventories.

Turkish producers’ capacity utilization decreased during 2015‐17 ***. Turkish producers’ inventories, as a ratio to total shipments, remained relatively unchanged from 2015 to 2017. Producers from Turkey ***. Two of the six responding Turkish producers reported that could switch production from LDWP to water pipes. Imports from nonsubject sources

Nonsubject imports accounted for 17.1 percent of total U.S. imports, by quantity, in

2017. The largest sources of nonsubject imports during 2015‐17 were Germany and Japan.

10 One producer in Korea, EEW, responded to the Commission’s questionnaire. According to estimates, it accounts for approximately *** percent of exports of LDWP to the United States from Korea.

11 Six producers in Tukey responded to the Commissioner’s questionnaire. According to estimates, they account for approximately *** percent of exports of LDWP to the United States from Turkey.

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Supply constraints Most U.S. producers reported that they have not had supply constraints since January

2015. However, U.S. producer *** reported that two large orders constrained its available supply during 2015. Three of 20 responding importers reported supply constraints since January 2015.12 Importer *** reported that ***. Importer *** stated that there has been limited capacity and production of LDWP from global suppliers and that trade cases and the uncertainty of the section 232 investigation has limited the supply to the U.S. market.

U.S. demand

Based on available information, the overall demand for LDWP is likely to experience small changes in response to changes in price. The main contributing factors are the lack of substitute products and the small‐to‐moderate cost share of LDWP in most of its end‐use products.

Since LDWP is used as an intermediate product, demand for LDWP depends on the price and productivity of the end product for which it is used. Most LDWP is used in the transmission of oil and gas, including liquefied natural gas (LNG); therefore, demand for LDWP has historically been sensitive to changes in oil and gas prices which affect the capital investment in the production of oil and gas, where a large portion of LDWP is used.

Spot prices for oil and natural gas fluctuated between January 2015 and December 2017, with the price of oil increasing overall and the price of natural gas decreasing slightly overall (figure II‐1). The WTI spot price for oil peaked in June 2015, declined to its lowest point in February 2016 and then increased irregularly through the remainder of the period. The Henry Hub spot price of natural gas fell to its lowest point in March 2016, peaked in December 2016, and then fluctuated through 2017.

12 When asked to describe its firm’s supply constraints, importer *** stated that it “refused to meet Chinese pricing” but did not provide any further explanation.

II‐8

Figure II-1 Oil and natural gas: Short term actual and predicted monthly West Texas crude oil prices and Henry Hub spot prices of natural gas, January 2015-December 2019

Crude oil prices

Natural gas prices

Source: U.S. EIA, https://www.eia.gov/outlooks/steo/, retrieved January 29, 2018.

II‐9

Production of oil and gas can affect demand conditions for LDWP, and rig count is a leading indicator of oil and gas sector activity. Crude petroleum and natural gas production fluctuated during 2015‐17. Crude petroleum production levels decreased overall from 9.41 million barrels of crude oil per day in 2015 to 9.3 million barrels in 2017. Natural gas production decreased from 74.15 billion cubic feet per day in 2015 to 73.57 billion cubic feet per day in 2017.13 U.S. rig count also fluctuated during 2015‐17 (figure II‐2). Both the number of oil rigs and rotary rigs used for natural gas fluctuated, but overall decreased from 1,482 rigs and 328 rigs, respectively, in the first week of January 2015 to 747 rigs and 182 rigs, respectively, in the last week of December 2017. Figure II-2 Rotary rig count: Average weekly rig counts, January 2015-December 2017

Source: Hughes Incorporated, http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother, retrieved January 29, 2018.

The number of miles of completed pipelines increased, though associated with fewer projects, from 2015 to 2016 (table II‐4). The number of planned projects as well as miles of pipeline more than doubles from 2016 to 2017.14

13 U.S. EIA, Short‐term Energy Outlook, January 2018. 14 This data includes pipeline for projects that are publically announced, applied, approved, filed, or

re‐filed with the Federal Energy Regulatory Commission (FERC), or under construction. Petitioners noted that many projects are indefinitely delayed or cancelled and therefore this data may be of limited use in measuring future demand for LDWP. Petitioners’ postconference brief, p. 18.

II‐10

Table II-4 Natural gas: Number of miles of pipeline and number of projects reported by the Department of Energy for projects completed or planned to be completed,1 2015-19

Item 2015 2016 2017 2018 2019

Completed Planned1 Miles of pipeline 424 537 4,006 1,497 113 Number of projects 27 24 61 30 7

1 Includes pipeline for projects that are publically announced, applied, approved, filed, or pre-filed with the Federal Energy Regulatory Commission (FERC), or under construction. Note.--This data contains an aggregation of natural gas pipeline expansion projects slated to commence operations in coming years, and completed in past years. The data are not collected on an EIA survey. This information was compiled from trade press (e.g., PointLogic Energy, SNL), pipeline company websites, and the Federal Energy Regulatory Commission (FERC) on planned pipeline construction. The amount of capacity additions that come online may be significantly different than reflected in accompanying data. These data are not a forecast. Generally, only natural gas transmission lines are included in this file; gathering lines, distribution lines, and LNG marine terminals are excluded. Source: Compiled by the U.S. Dept. of Energy, Energy Information Administration from the Federal Energy Regulatory Commission (FERC), trade press, company websites, SNL Financial, and PointLogic Energy, released May 11, 2017.

Demand for structural LDWP is driven by demand in the construction sector. The value of U.S. nonresidential construction increased 12.2 percent from $641.7 billion in January 2015 to $720.3 billion in December 2017 (figure II‐3). Figure II-3 U.S. construction: Total and nonresidential construction put in place, seasonally adjusted, monthly, January 2015-December 2017

Source: Manufacturing, Mining, and Construction Statistics, Construction Spending, U.S. Census Bureau, http://www.census.gov/construction/c30/historical_data.html; retrieved February 21, 2018.

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End uses and cost share U.S. demand for LDWP depends on the demand for U.S.‐produced downstream

products. Reported end uses include oil and gas transmission pipeline and structural products or construction applications such as marine or bridge foundations and sign pole structure.

LDWP accounts for a small share of the cost of the end‐use products in which it is used. Most U.S. producers and imports reported cost shares for oil and gas transmission ranging from 20 to 35 percent and general structural applications ranging from 2 to 10 percent. Business cycles

Nine of 11 U.S. producers and 9 of 21 importers indicated that the market was subject

to business cycles or distinct conditions of competition. Specifically, four U.S. producers and six importers reported that demand for LDWP is linked to the production and consumption of oil and gas. One importer, ***, stated that in addition the price of oil and gas, demand for LDWP is constrained by the availability of pipeline constructors and welders. Five U.S. producers reported that the increased competition with imported LDWP has impacted their domestic sales. Demand trends

A plurality of U.S. producers and importers reported that U.S. demand for LDWP has

fluctuated since January 1, 2015 (table II‐5). In general, firms reported that demand for LDWP fluctuates with changes in the prices for crude oil and natural gas as well as the drilling for those resources. Several firms noted the price declines in the oil and gas markets through 2016 and the increase in energy prices in 2017‐18. U.S. producer *** stated that regulatory policies involving project permits can affect the demand for LDWP. U.S. producer *** stated there was an increase in dock terminal construction which increased the demand for LDWP in this market; however, offshore rig work decreased in 2015‐16 due to a decrease in energy prices that negatively affected demand for LDWP in this market. Table II-5 LDWP: Firms’ responses regarding U.S. demand and demand outside the United States

Item Increase No change Decrease Fluctuate Demand in the United States U.S. producers 1 --- 4 6 Importers 5 2 5 9 Demand outside the United States U.S. producers 1 1 3 4 Importers 2 3 5 8

Source: Compiled from data submitted in response to Commission questionnaires. Firms responses regarding demand for LDWP outside of the United States varied. U.S. producer *** indicated that demand for LDWP in other countries such as Mexico has increased; however, it stated that duties and domestic content requirements have limited U.S. exports of most API line pipe. U.S. producers *** stated that demand for LDWP outside of the United

II‐12

States has decreased due to low energy prices, political unrest (e.g., Middle East) and permitting issues (e.g., Canada). A plurality of importers reported the demand outside of the United States has fluctuated due to fluctuating energy prices. Importer *** stated that demand in the EU has increased. Substitute products

All U.S. producers and 16 of 19 importers reported that there were no substitutes. One

importer identified seamless pipe used in oil and gas lines as a potential substitute but noted that it is not considered an economically viable substitute because of its significantly higher costs. One firm identified SSAW pipe as a potential substitute for LDWP in all applications, and stated that SSAW pipe affects the price of LDWP. One importer identified structural beams used in structural/construction applications as a potential substitute and indicated that its price did not affect the price of LDWP.

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported LDWP depends upon such factors as relative prices, quality (e.g., grade standards, defect rates, etc.), and conditions of sale (e.g., price discounts/rebates, lead times between order and delivery dates, reliability of supply, product services, etc.). Based on available data, staff believes that there is a high degree of substitutability between domestically produced API LDWP and API LDWP imported from subject sources and ASTM LDWP and ASTM LDWP imported from subject sources.

Lead times

LDWP is primarily produced‐to‐order. U.S. producers reported that 94.4 percent of their commercial shipments were produced‐to‐order, with lead times averaging 78 days. The remaining 5.6 percent of their commercial shipments came from U.S. inventories, with lead times averaging 12 days. Importers reported that 98.1 percent of their commercial shipments were produced‐to‐order, with lead times averaging 118 days. The remaining 1.9 percent of their commercial shipments came from U.S. inventories, with lead times averaging 42 days.

Factors affecting purchasing decisions

Purchasers responding to lost sales lost revenue allegations15 were asked to identify the main purchasing factors their firm considered in their purchasing decisions for LDWP. The most often cited top‐three factors firms consider in their purchasing decisions for LDWP were price (21 firms), ability to meet delivery/project schedule (15 firms), and quality (10 firms) as shown in table II‐6. Quality was the most frequently cited first‐most important factor (cited by 8 firms),

15 This information is compiled from responses by purchasers identified by Petitioners or other U.S. producers to the lost sales lost revenue allegations. See Part V for additional information.

II‐13

followed by price (6 firms); ability to meet delivery/project schedule was the most frequently reported second‐most important factor (10 firms); and price was the most frequently reported third‐most important factor (10 firms). Purchasers also cited the ability to meet technical specifications, the reputation of the manufacturer/mill, prior experience with supplier, warranties, liability acceptance by supplier, value added services (e.g., coating, jointing, logistics, and storage), supplier on customer’s approved manufacturers list, payment terms, and access to high quality steel as additional factors that affect their purchasing decisions. Table II-6 LDWP: Ranking of factors used in purchasing decisions as reported by U.S. purchasers, by factor1

Factor First Second Third Total Price / cost 6 5 10 21 Delivery/project schedule --- 10 5 15 Quality 8 1 1 10 Technical/project specifications 5 3 --- 8 Availability / supply 1 5 1 7 Other2 4 2 3 NA

1 Some purchasers listed more than three factors in their response. 2 Other factors include adherence to contract documents, Buy America requirements, customer’s approval of mill, trust and relationship with mill for the first factor; preference for domestic product and lead time for second factor; and past service experience, lead time and vendor reputation for the third factor. Source: Compiled from data submitted in response to Commission questionnaires.

The vast majority of purchasers did not indicate that purchasing U.S.‐produced product was an important factor in their purchasing decisions.16 However, one purchaser (***) reported that some projects had domestic product requirements. In a January 24, 2017 Presidential Memorandum regarding the construction of American pipelines, the President of the United States directed the Secretary of Commerce to develop a plan under which all new pipelines, as well as retrofitted, repaired, or expanded pipelines, use materials and equipment produced in the United States.17

The majority of purchasers (20 of 22) reported that they use bids for their LDWP purchases.18 Purchasers *** reported that a bid package is sent to each bidder which includes quantity, line pipe specifications, and company’s specifications for production of line pipe; they stated that bids are evaluated on a supplier’s ability to comply with specifications, price, and

16 U.S. purchasers’ Lost Sales and Lost Revenue Survey, questions 2, 3, and 7. 17 “Produced in the United States” means that (1) all manufacturing processes occur in the United

States; (2) steel or iron material or products manufactured abroad from semi‐finished steel or iron from the United States are not “produced in the United States”; (3) steel or iron material or products manufactured in the United States from semi‐finished steel or iron of foreign origin are not “produced in the United States.” Source: Presidential Memorandum Regarding Construction of American Pipelines, The White House, https://www.whitehouse.gov/presidential‐actions/presidential‐memorandum‐regarding‐construction‐american‐pipelines/, retrieved January 23, 2018.

18 One purchaser (***) reported that it purchased LDWP through individual transactions and (***) reported that it used purchase orders submitted by email.

II‐14

delivery time/project schedule. Purchaser *** reported that it evaluates mills’ RFPs on a delivered price; it stated that bids are analyzed based on the technical properties of the steel and pipe which are more stringent than API and ASTM standards. *** added that it also takes into consideration mill availability, payment terms, logistics and schedule plan, contract terms, and price. Purchaser *** stated that its line pipe orders are executed through a competitively bid purchase order agreement; it includes foreign mills in the opportunity to bid “if domestic mills are unable to support project in capability, competitive price or schedule.” For smaller orders under 500 short tons, *** solicits bids from distributors located within the United States; these bids are awarded to the distributor which can meet project schedule and then price.

Comparison of U.S.‐produced and imported LDWP

In order to determine whether U.S.‐produced LDWP can generally be used in the same applications as imports from Canada, China, Greece, India, Korea, and Turkey, U.S. producers and importers were asked whether the products can always, frequently, sometimes, or never be used interchangeably. As shown in table II‐7, the majority of U.S. producers reported that domestic product and LDWP from subject countries was always interchangeable. U.S. producers *** stated that LDWP is completely interchangeable as long as it meets API specifications and are sold to the same customer base.

Importers’ responses varied by country comparison. A plurality of importers indicated that domestic LDWP and LDWP from Canada, Greece, and Turkey was always interchangeable. A plurality of importers reported that domestic product and LDWP from China and India was sometimes interchangeable. Importer *** stated that LDWP from China and India had inferior quality and that many U.S. customers do not have Chinese suppliers in their approved manufacturer list of qualified suppliers. Importer *** also stated that domestic LDWP is only sometimes interchangeable with LDWP from China or India and noted that certain projects require domestically produced LDWP or LDWP supplied by a qualified LDWP manufacturer. Responses were mixed when comparing domestic product and LDWP from Korea; six importers reported that the products were always interchangeable, six importers reported that that were frequently interchangeable, and four reported that they were sometimes interchangeable. Importer *** reported that U.S. manufacturers do not produce the products it imports from Korea such as heavy wall conductor pipes in grades thru X80 up to 2" thick, heat treated process pipes in ASTM A671 and A672 standards for processing and LNG plants, and heavy wall structural pipes per API‐2B grades up to 4" thick for fabrication in offshore oil and gas as well as civil construction projects.

II‐15

Table II-7 LDWP: Interchangeability between LDWP produced in the United States and in other countries, by country pair

Country pair U.S. producers U.S. importers

A F S N A F S N United States vs. Canada 9 1 1 --- 5 3 2 --- United States vs. China 9 1 1 --- 4 3 6 --- United States vs. Greece 8 1 1 --- 5 3 2 --- United States vs. India 8 1 2 --- 3 3 6 --- United States vs. Korea 9 1 1 --- 6 6 4 --- United States vs. Turkey 9 1 1 --- 5 4 3 --- Canada vs. China 7 1 1 --- 2 1 4 --- Canada vs. Greece 7 1 1 --- 3 2 2 --- Canada vs. India 7 1 1 --- 2 1 4 --- Canada vs. Korea 7 1 1 --- 3 4 3 --- Canada vs. Turkey 7 1 1 --- 2 3 2 --- China vs. Greece 7 1 1 --- 2 1 4 --- China vs. India 7 1 1 --- 2 1 4 --- China vs. Korea 7 1 1 --- 3 3 5 --- China vs. Turkey 7 1 1 --- 2 1 4 --- Greece vs. India 7 1 1 --- 2 1 4 --- Greece vs. Korea 7 1 1 --- 3 4 3 --- Greece vs. Turkey 7 1 1 --- 2 3 2 --- India vs. Korea 7 1 1 --- 3 3 5 --- India vs. Turkey 7 1 1 --- 2 1 4 --- Korea vs. Turkey 7 1 1 --- 2 2 4 --- United States vs. nonsubject 7 --- 2 --- 3 3 4 2 Canada vs. nonsubject 7 --- 1 --- 2 1 2 1 China vs. nonsubject 7 --- 1 --- 2 2 2 1 Greece vs. nonsubject 7 --- 1 --- 2 1 2 1 India vs. nonsubject 7 --- 1 --- 2 3 2 1 Korea vs. nonsubject 7 --- 1 --- 2 2 3 1 Turkey vs. nonsubject 7 --- 1 --- 2 1 3 1

Note.--A=Always, F=Frequently, S=Sometimes, N=Never. Source: Compiled from data submitted in response to Commission questionnaires.

In addition, U.S. producers and importers were asked to assess how often differences other than price were significant in sales of LDWP from the United States, subject, or nonsubject countries. As seen in table II‐8, the majority of U.S. producers reported that differences other than price were never a factor in their firms’ sales of LDWP. A plurality of importers reported that differences other than price were sometimes a factor in their firms’ sales of LDWP from subject countries. Differences other than price cited by importers include product range (specific grades and thicknesses not produced in the United States), quality, domestic product liability insurance, lead times, available capacity, and purchasers’ approved

II‐16

manufacturer lists. Producer and importer Evraz also stated that some customers prefer to purchase from vertically integrated producers.19 Table II-8 LDWP: Significance of differences other than price between LDWP produced in the United States and in other countries, by country pair

Country pair U.S. producers U.S. importers

A F S N A F S N United States vs. Canada --- 1 2 8 1 2 4 3 United States vs. China --- 1 2 8 2 3 5 3 United States vs. Greece --- 1 2 7 1 1 4 4 United States vs. India --- 2 2 6 1 3 6 2 United States vs. Korea --- 1 2 8 2 3 7 4 United States vs. Turkey --- 1 2 7 3 1 5 3 Canada vs. China --- 1 2 6 1 1 3 2 Canada vs. Greece --- 1 2 6 --- 1 4 2 Canada vs. India --- 1 2 6 --- 3 2 2 Canada vs. Korea --- 1 2 6 1 2 4 3 Canada vs. Turkey --- 1 2 6 --- 1 4 2 China vs. Greece --- 1 2 6 1 1 3 2 China vs. India --- 1 2 6 1 1 3 2 China vs. Korea --- 1 2 6 2 1 5 2 China vs. Turkey --- 1 2 6 1 1 3 2 Greece vs. India --- 1 2 6 --- 1 4 2 Greece vs. Korea --- 1 2 6 1 1 5 2 Greece vs. Turkey --- 1 2 6 --- 1 4 2 India vs. Korea --- 1 2 6 1 1 5 3 India vs. Turkey --- 1 2 6 --- 1 3 3 Korea vs. Turkey --- 1 2 6 --- 2 3 2 United States vs. nonsubject --- 2 2 5 1 3 3 3 Canada vs. nonsubject --- 1 2 5 --- 1 2 3 China vs. nonsubject --- 1 2 5 --- 1 2 3 Greece vs. nonsubject --- 1 2 5 --- 1 2 3 India vs. nonsubject --- 1 2 5 --- 1 3 3 Korea vs. nonsubject --- 1 2 5 --- 1 3 3 Turkey vs. nonsubject --- 1 2 5 1 1 2 3

Note.--A = Always, F = Frequently, S = Sometimes, N = Never. Source: Compiled from data submitted in response to Commission questionnaires.

19 Conference transcript, pp. 146‐147 (Kristofic).

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§ 1677(7)(B) and 1677(7)(C)). Information on the subsidies and dumping margins was presented in Part I of this report and information on the volume and pricing of imports of the subject merchandise is presented in Part IV and Part V. Information on the other factors specified is presented in this section and/or Part VI and (except as noted) is based on the questionnaire responses of eleven firms that accounted for the vast majority of U.S. production of LDWP in 2017.

U.S. PRODUCERS

The Commission issued a U.S. producer questionnaire to 32 firms based on information contained in the petition. Eleven firms provided usable data on their production activities.1 Staff believes that these responses represent the vast majority of U.S. production of LDWP.

Table III-1 lists U.S. producers of LDWP, their production locations, positions on the petition, and shares of total production.

1 A twelfth producer ***, submitted its U.S. producer questionnaire response too late to be incorporated in the staff report. The firm is believed to account for *** percent or less of U.S. LDWP production.

III-2

Table III-1 LDWP: U.S. producers, their positions on the petitions, production locations, and shares of reported production, 2017

Firm Position on petition Production location(s) Share of production

(percent)

American Petitioner Birmingham, AL ***

Atlas *** Chicago, IL ***

Berg Petitioner Panama City, FL Mobile, AL ***

Dura-Bond Petitioner Steelton, PA *** Evraz *** Portland, OR *** Greens Bayou *** Houston, TX *** Jindal Tubular USA *** St Louise, MS *** JSW *** Baytown, TX ***

Skyline Petitioner

Luka, MS Morrisville, PA Camp Hill, PA Newton, IL Longview, WA ***

Stupp Petitioner Baton Rouge, LA ***

Trinity *** Saint Charles, MO ***

Welspun *** Little Rock, AR ***

Total *** Note.—***


Table III-2 presents information on U.S. producers’ ownership, related and/or affiliated

firms of LDWP. U.S. producers ***, ***, and *** are related to foreign producers of the LDWP. Also, as discussed in great detail below, three U.S. producers are related to U.S. importers of LDWP and directly import the subject merchandise. No U.S. producer reported purchasing LDWP from U.S. importers. Table III-2 LDWP: U.S. producers’ ownership, related and/or affiliated firms

* * * * * * *

Table III-3 presents U.S. producers’ reported changes in operations since January 1, 2015. There was one reported acquisition, one revised labor agreement, and one plant closure. In 2016, ***. In addition, three producers reported expansions, while every producer other than *** reported prolonged shutdowns or curtailments.

III-3

Table III-3 LDWP: U.S. producers’ reported changes in operations, since January 1, 2015

Date Company Event 2016 *** *** 2017 *** *** 2017 *** *** 2016 *** *** 2015 *** *** 2015 *** *** 2017 Dura-Bond Acquisition: In December 2017, acquired a tubular products mill from US Steel situated

at McKeesport, PA.2 2017 Dura-Bond Prolonged shutdown or curtailment: In November 2017, Dura-Bond laid off 180

employees at its Steelton, PA pipe mill.3 2017 *** *** 2016 *** *** 2016 *** ***


U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

Table III-4 and figure III-1 present U.S. producers’ production, capacity, and capacity utilization. From 2015 to 2017, U.S. producers’ capacity decreased by 1.3 percent, while production decreased by 37.5 percent and capacity utilization decreased by 18.8 percentage points. Four of the five largest producers reported a decline in production from 2015 to 2017; however, *** reported a *** percent increase in production during this period.4 Similarly, *** largest producers reported a decline in capacity utilization over the same period; *** was the exception.

2 Norris, Adam, and Dura-Bond Industries. “Dura-Bond to Restart USS McKeesport Tubular.” January 24, 2017. Accessed February 12, 2018. https://www.dura-bond.com/dura-bond-to-restart-uss-mckeesport-tubular/.

3 Coyne, Justine. “Dura-Bond to Lay Off 180 at Pennsylvania Pipe Steel Mill.” S&P Global Platts. September 28, 2017. Accessed February 12, 2018. https://www.platts.com/latestnews/metals/pittsburgh/dura-bond-to-lay-off-180-at-pennsylvania-pipe-21095060.

4 *** increase in production from 2015-16 was due to *** project won in 2014, where production occurred primarily in 2016 and 2017. These projects include the ***. EDIS ID # 637263

https://www.dura-bond.com/dura-bond-to-restart-uss-mckeesport-tubular/

https://www.dura-bond.com/dura-bond-to-restart-uss-mckeesport-tubular/

https://www.platts.com/latest-news/metals/pittsburgh/dura-bond-to-lay-off-180-at-pennsylvania-pipe-21095060

https://www.platts.com/latest-news/metals/pittsburgh/dura-bond-to-lay-off-180-at-pennsylvania-pipe-21095060

III-4

Table III-4 LDWP: U.S. producers’ production, capacity, and capacity utilization, 2015-17

Item Calendar year

2015 2016 2017 Capacity (short tons) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total capacity 3,808,024 3,900,575 3,760,155 Production (short tons) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total production 1,952,563 1,393,262 1,220,125 Capacity utilization (percent) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average capacity utilization 51.3 35.7 32.4 Source: Compiled from data submitted in response to Commission questionnaires. Figure III-1 LDWP: U.S. producers’ production, capacity, and capacity utilization, 2015-17

* * * * * * *

Alternative products

Table III‐5 presents data on U.S. producers’ capacity and production of alternative products using the same equipment and machinery as LDWP. Large diameter welded pipes are manufactured on three different types of equipment, namely: ERW, HSAW, and LSAW pipe mills. *** reported producing products other than LDWP on ERW mills, with LDWP accounting for majority of all products made on the same ERW equipment from 2015-17. *** reported producing other products on HSAW or LSAW mills used to produce LDWP. Table III-5 LDWP: U.S. producers’ overall capacity and production on the same equipment used to produced LDWP, 2015-17

* * * * * * *

III-5

Figure III-2 LDWP: U.S. production by method of production, 2015-17

* * * * * * *

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORTS

Table III-6 presents U.S. producers’ U.S. shipments, export shipments, and total shipments. From 2015 to 2017, U.S. producers’ U.S. shipments declined by both quantity and value, by 30.5 percent and 35.2 percent, respectively. Average unit values for U.S. producers’ U.S. shipment fluctuated each year, from a high of $1,100 per short ton in 2015 to a low of $1,005 per short ton in 2016 before increasing to $1,025 per short ton in 2017, resulting in a net decline of 6.9 percent from 2015 to 2017. Table III-6 LDWP: U.S. producers’ U.S. shipments, exports shipments, and total shipments, 2015-17

Item Calendar year

2015 2016 2017 Quantity (short tons) U.S. shipments 1,782,207 1,477,973 1,239,411 Export shipments *** *** ***

Total shipments *** *** *** Value (1,000 dollars) U.S. shipments 1,960,885 1,485,645 1,269,803 Export shipments *** *** ***

Total shipments *** *** *** Unit value (dollars per short ton) U.S. shipments 1,100 1,005 1,025 Export shipments *** *** ***

Total shipments *** *** *** Share of quantity (percent) U.S. shipments *** *** *** Export shipments *** *** ***

Total shipments 100.0 100.0 100.0

Share of value (percent)

U.S. shipments *** *** *** Export shipments *** *** ***

Total shipments 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires.

III-6

U.S. PRODUCERS’ INVENTORIES

Table III-7 presents U.S. producers’ end-of-period inventories and the ratio of these inventories to U.S. producers’ production, U.S. shipments, and total shipments. From 2015 to 2017, end-of-period inventories decreased by 47.6 percent. The ratio of inventories to U.S. production, U.S. shipments, and total shipments all decreased throughout the period for which data were collected. Table III-7 LDWP: U.S. producers’ inventories, 2015-17

Item Calendar year

2015 2016 2017 Quantity (short tons) U.S. producers' end-of-period inventories 262,489 176,042 137,593 Ratio (percent) Ratio of inventories to.-- U.S. production 13.4 12.6 11.3

U.S. shipments 14.7 11.9 11.1 Total shipments *** *** ***


U.S. PRODUCERS’ IMPORTS AND PURCHASES

U.S. producers’ imports and purchases of LDWP are presented in table III-8. U.S. producers reported directly importing LDWP from four of the subject countries ***, as well as nonsubject source ***. Reasons cited for importing include closer proximity to U.S. project sites and lower costs.

Table III-8 LDWP: U.S. producers’ U.S. production, imports and purchases, 2015-17

* * * * * * *

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III-9 presents U.S. producers’ employment-related data. From 2015 to 2017, the number of production and related workers (“PRWs”), total hours worked, hours worked per PRW, wages paid all decreased by 30.3 percent, 36.1 percent, 8.4 percent, and 35.0 percent, respectively, while hourly wages increased by 1.7 percent per hour.5 Over the same period, short ton productivity declined by 2.2 percent per 1,000 hours while unit labor costs increased by 4.0 percent per short ton. All U.S. producers reported reductions in the number of PRWs in at least one year from 2015 to 2017. Ten U.S. producers reported negative employment trends,

5 ***. ***’s U.S. producer questionnaire, II-11.

III-7

such layoffs, reduced shifts, labor cost increases from prolonged idling, and reductions in productivity.6 Table III-9 LDWP: Average number of production and related workers, hours worked, wages paid to such employees, hourly wages, productivity, and unit labor costs, 2015-17

Item Calendar year

2015 2016 2017 Production and related workers (PRWs) (number) 2,938 2,310 2,049 Total hours worked (1,000 hours) 6,293 4,680 4,020 Hours worked per PRW (hours) 2,142 2,026 1,962 Wages paid ($1,000) 181,694 136,501 118,071 Hourly wages (dollars per hour) $28.87 $29.17 $29.37 Productivity (short tons per 1,000 hours) 310.3 297.7 303.5 Unit labor costs (dollars per short tons) $93.05 $97.97 $96.77


6 ***. ***’s U.S. producer questionnaire, II-11.

IV-1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND MARKET SHARES

U.S. IMPORTERS

The Commission issued importer questionnaires to 135 firms believed to be importers of LDWP, as well as to all U.S. producers of LDWP.1 Usable questionnaire responses were received from 22 companies, representing *** percent of U.S. imports from subject sources, 10.4 percent of imports from nonsubject sources, and 53.4 percent of imports from all sources. Table IV-1 lists all responding U.S. importers of LWDP from Canada, China, Greece, India, Korea, Turkey and other sources, their locations, and their shares of U.S. imports, in 2017.

U.S. IMPORTS

Table IV-2 presents data for U.S. imports of LDWP from Canada, China, Greece, India, Korea, and Turkey and from nonsubject sources. From 2015 to 2017, the quantity of imports from five of the six subject countries decreased, while the quantity of imports from India increased from 51,083 short tons to 392,096 short tons during the same period. Imports from nonsubject sources decreased by 44.5 percent from 2015 to 2017. The average unit values of imports from aggregate subject and nonsubject countries decreased from 2015 to 2017.

1 The Commission issued questionnaires to those firms identified in the petition, along with firms that, based on a review of data provided by U.S. Customs and Border Protection (“Customs”), may have accounted for more than one percent of total imports under HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000 in 2017.

IV-2

Table IV-1 LDWP: U.S. importers, their headquarters, and share of total imports by source, 2017

Firm Headquarters

Share of imports by source (percent) Subject sources

Nonsubject sources

All import sources

Ace Steel Englewood Cliffs, NJ *** *** ***

American Chesterfield, MO *** *** *** Athanor Houston, TX *** *** *** Bechtel Houston, TX *** *** *** Berg Mobile, AL *** *** *** Borusan Mannesmann Houston, TX *** *** *** C&F Houston, TX *** *** *** Champions Cinco Houston, TX *** *** *** CMC Irving, TX *** *** *** CPW America Houston, TX *** *** *** EEW Steel Houston, TX *** *** ***

Evraz Regina and Camrose, AB *** *** ***

Fortis Houston, TX *** *** *** MS Global Cerritos, CA *** *** *** Optima Concord, CA *** *** *** POSCO Daewoo Teaneck, NJ *** *** *** Skyline Parsippany, NJ *** *** *** Stemcor New York, NY *** *** *** Sumitomo Houston, TX *** *** *** Sunbelt Houston, TX *** *** *** Tata Schaumburg, IL *** *** *** Welspun Little Rock, AR *** *** ***

Total *** *** *** Source: Compiled from data submitted in response to Commission questionnaires.

IV-3

Table IV-2 LDWP: U.S. imports by source, 2015-17

Item Calendar year

2015 2016 2017 Quantity (short tons) U.S. imports from.-- Canada 338,068 67,538 174,179

China 52,301 20,890 34,938 Greece 201,344 90,802 13,854 India 51,083 32,719 392,096 Korea 250,799 189,322 201,875 Turkey, subject 1 127,166 119,568 62,490

Subject sources 1,020,762 520,840 879,433 Nonsubject sources 325,904 223,719 180,801

All import sources 1,346,666 744,559 1,060,234 Value (1,000 dollars) U.S. imports from.-- Canada 413,100 65,257 180,546



All import sources 1,448,439 667,361 908,262 Unit value (dollars per short ton) U.S. imports from.-- Canada 1,222 966 1,037

China 774 661 843 Greece 1,036 816 824 India 1,019 816 753 Korea 809 772 795 Turkey, subject 1 1,224 1,091 980

Subject sources 1,051 876 840 Nonsubject sources 1,153 943 939

All import sources 1,076 896 857 Table continued on next page.

IV-4

Table IV-2—Continued LDWP: U.S. imports by source, 2015-17

Item Calendar year

2015 2016 2017 Share of quantity (percent) U.S. imports from.-- Canada 25.1 9.1 16.4

China 3.9 2.8 3.3 Greece 15.0 12.2 1.3 India 3.8 4.4 37.0 Korea 18.6 25.4 19.0 Turkey, subject 1 9.4 16.1 5.9

Subject sources 75.8 70.0 82.9 Nonsubject sources 24.2 30.0 17.1

All import sources 100.0 100.0 100.0 Share of value (percent)

U.S. imports from.-- Canada 28.5 9.8 19.9



All import sources 100.0 100.0 100.0 Ratio to U.S. production

U.S. imports from.-- Canada 17.3 4.8 14.3



All import sources 69.0 53.4 86.9 1 Turkey's reported subject imports ("Turkey, subject") excludes LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030. Imports from Turkey of LDWP between 16" and 24" O.D. under those excluded HTS numbers are reported, however, as part of the "nonsubject sources" and "all import sources" aggregates. Note.--Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Source: Official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000, accessed February 8, 2018

IV-5

Figure IV-1 LDWP: U.S. imports by source, 2015-17

* * * * * * *

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury determination if imports of the subject merchandise are found to be negligible.2 Negligible imports are generally defined in the Act, as amended, as imports from a country of merchandise corresponding to a domestic like product where such imports account for less than 3 percent of the volume of all such merchandise imported into the United States in the most recent 12-month period for which data are available that precedes the filing of the petition or the initiation of the investigation. However, if there are imports of such merchandise from a number of countries subject to investigations initiated on the same day that individually account for less than 3 percent of the total volume of the subject merchandise, and if the imports from those countries collectively account for more than 7 percent of the volume of all such merchandise imported into the United States during the applicable 12-month period, then imports from such countries are deemed not to be negligible.3 Table IV-3 presents imports the twelve month period preceding the filing of the petition.

2 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1), 1671d(b)(1), 1673b(a)(1), and 1673d(b)(1)).

3 Section 771 (24) of the Act (19 U.S.C § 1677(24)).

IV-6

Table IV-3 LDWP: U.S. imports the twelve months preceding the filling of the petition, by source, 2017

Calendar year 2017 AD calculations CVD calculations

Quantity (short tons)

Share of quantity (percent)


Share of quantity (percent)

U.S. imports from.-- Canada 174,179 18.1 174,179 16.4

China 34,938 3.6 34,938 3.3 Greece 13,854 1.4 13,854 1.3 India 392,096 40.7 392,096 37.0 Korea, subject 1 103,937 10.8 201,875 19.0 Turkey, subject2 62,490 6.5 62,490 5.9

Subject sources 781,495 81.2 879,433 82.9 Nonsubject sources 180,801 18.8 180,801 17.1

All import sources 962,296 100.0 1,060,234 100.0 1 Korea's reported subject imports ("Korea, subject") exclude LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030 for the purposes of the AD calculations (since there is an existing antidumping duty order on those goods). Imports from Korea of LDWP between 16" and 24" O.D. under those excluded HTS numbers have been removed from the total for purposes of the antidumping duty (AD) negligibility calculations. Imports under these three HTS numbers for 16" and 24" O.D. merchandise are, however, included in "Korea, subject" for the purpose of the CVD calculations as there is no existing countervailing duty order on merchandise of that O.D. size range from Korea. 2 Turkey's reported subject imports ("Turkey, subject") exclude LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030. Imports from Turkey of LDWP between 16" and 24" O.D. under those excluded HTS numbers have been removed from the total for purposes of the negligibility calculations: for both AD and CVD calculations. Since no imports were reported under these HTS numbers for calendar 2017 from Turkey, this has no impact on the data. Note.--Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Source: Official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000, accessed February 8, 2018.

CUMULATION CONSIDERATIONS

In assessing whether imports should be cumulated, the Commission determines whether U.S. imports from the subject countries compete with each other and with the domestic like product and has generally considered four factors: (1) fungibility, (2) presence of sales or offers to sell in the same geographical markets, (3) common or similar channels of distribution, and (4) simultaneous presence in the market. Information regarding channels of distribution, market areas, and interchangeability appear in Part II. Additional information concerning fungibility, geographical markets, and simultaneous presence in the market is presented below.

IV-7

Fungibility

Table IV-4 presents data for U.S. producers’ and U.S. importers’ U.S. shipments of imported large diameter welded pipes by grade. U.S. shipments by U.S. producers were concentrated in the higher-graded line pipe, as were U.S. shipments by importers of LDWP from Canada, Greece, and India. U.S. shipments by importers of LDWP from Korea were more heavily present in lower-graded line pipe, while U.S. shipments by importers of LDWP from China and Turkey were concentrated in ASTM (structural) pipe. Table IV-4 LDWP: U.S. producers’ and U.S. importers’ U.S. shipments and imports by grade, 2017

* * * * * * *

Figure IV-2 LDWP: Share of U.S. shipments by grade, 2017

* * * * * * *

Table IV-5 presents data for U.S. producers’ and U.S. importers’ U.S. shipment and U.S

imports by OD size and manufacture.

Table IV-5 LDWP: U.S. producers’ and U.S. shipment and U.S. by OD size and manufacture, 2017

* * * * * * *

Figure IV-3 LDWP: Share of U.S. shipments by OD size and manufacture, 2017

* * * * * * *

Geographical markets

Table IV-6 presents data for U.S. imports of LDWP by border of entry. U.S. imports from all six subject sources entered through the East in 2017. Imports from five subject sources entered through the South, four through the North, and three through in the West. The largest volume of subject imports entered through the South in 2017.

Presence in the market

Table IV-7 and figure IV-2 present monthly import statistics for LDWP January through December 2016. Imports from ***, ***, except *** were present in the market in each month from January 2015 through December 2017.

IV-8

Table IV-6 LDWP: U.S. imports by border of entry and source, 2017

Item Border of entry

East North South West Total Quantity (short tons) U.S. imports from.-- Canada 23,922 149,171 --- 1,086 174,179

China 7,866 592 13,423 13,056 34,938 Greece 13,852 --- 3 --- 13,854 India 169,873 35 222,188 --- 392,096 Korea 6,387 564 170,833 24,091 201,875 Turkey, subject 1 51,653 --- 10,837 --- 62,490

Subject sources 273,552 150,362 417,285 38,234 879,433 Nonsubject sources 10,611 678 150,478 19,034 180,801

All import sources 284,164 151,041 567,762 57,268 1,060,234

Share of quantity across (percent)

U.S. imports from.-- Canada 13.7 85.6 --- 0.6 100.0

China 22.5 1.7 38.4 37.4 100.0 Greece 100.0 --- 0.0 --- 100.0 India 43.3 0.0 56.7 --- 100.0 Korea 3.2 0.3 84.6 11.9 100.0 Turkey, subject 1 82.7 --- 17.3 --- 100.0

Subject sources 31.1 17.1 47.4 4.3 100.0 Nonsubject sources 5.9 0.4 83.2 10.5 100.0

All import sources 26.8 14.2 53.6 5.4 100.0

Share of quantity down (percent)

U.S. imports from.-- Canada 8.4 98.8 --- 1.9 16.4

China 2.8 0.4 2.4 22.8 3.3 Greece 4.9 --- 0.0 --- 1.3 India 59.8 0.0 39.1 --- 37.0 Korea 2.2 0.4 30.1 42.1 19.0 Turkey, subject 1 18.2 --- 1.9 --- 5.9 Subject sources 96.3 99.6 73.5 66.8 82.9

Nonsubject sources 3.7 0.4 26.5 33.2 17.1 All import sources 100.0 100.0 100.0 100.0 100.0

Note.--Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. 1 Turkey's reported subject imports ("Turkey, subject") exclude LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030. Imports from Turkey of LDWP between 16" and 24" O.D. under those excluded HTS numbers are reported, however, as part of the "nonsubject sources" and "all import sources" aggregates. Source: Official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000, accessed February 8, 2018.

IV-9

Table IV-7 LDWP: U.S. imports by subject source and source, January 2015 through December 2017

Item U.S. importers

Canada China Greece India Korea Quantity (short tons) 2015.-- January 42,788 4,408 20,202 15,311 36,901

February 34,737 2,130 --- 107 21,777 March 49,678 11,947 17,845 25,942 19,142 April 36,920 4,527 20,281 1,040 33,875 May 30,884 3,276 27,770 255 15,434 June 33,330 2,140 37,743 306 24,559 July 21,072 8,770 47,841 --- 16,431 August 21,937 10,370 17,053 8,040 14,447 September 13,954 628 12,610 25 11,596 October 17,579 1,907 --- --- 28,279 November 15,688 1,607 --- --- 20,892 December 19,500 591 --- 58 7,467

Quantity (short tons) 2016.-- January 20,147 2,705 6,068 344 17,583

February 3,287 4,477 4,534 9,511 25,382 March 5,083 1,557 364 --- 25,011 April 3,206 3,051 17,371 --- 26,963 May 3,585 663 --- --- 6,687 June 2,477 985 6,774 --- 8,816 July 1,337 1,620 3,452 --- 7,630 August 2,536 1,564 --- 2 15,496 September 1,363 363 --- 11,797 3,574 October 1,728 2,447 12,673 5 25,998 November 11,138 515 12,949 11,055 15,139 December 11,652 943 26,617 6 11,044

Quantity (short tons) 2017.-- January 3,606 5,580 --- 13 8,209

February 9,023 3,200 44 56,835 15,288 March 19,991 1,213 --- 63,469 12,660 April 7,518 4,156 2,054 16,218 12,602 May 24,933 3,493 --- 42,453 19,885 June 13,612 2,322 --- 21,305 12,139 July 12,283 3,269 --- 41,533 17,220 August 20,206 4,376 --- 39,967 17,434 September 19,934 4,002 --- 64,308 23,521 October 13,463 925 --- 45,989 23,171 November 13,684 737 11,754 --- 10,909 December 15,927 1,664 3 7 28,838

Table continued on next page.

IV-10

Table IV-7-Contined LDWP: U.S. imports by subject source and source, January 2015 through December 2017

Item

U.S. importers Turkey, subject1

Subject sources

Nonsubject sources

All import sources

Quantity (short tons) 2015.-- January 11,651 131,261 41,053 172,314

February 1,091 59,843 18,164 78,007 March 247 124,800 28,397 153,196 April 285 96,927 12,457 109,384 May 16,859 94,478 38,022 132,500 June 16,449 114,527 44,175 158,702 July 28,939 123,052 38,600 161,652 August 16,059 87,905 26,557 114,462 September 12,095 50,908 33,854 84,762 October 18,579 66,344 15,699 82,043 November 13 38,200 8,621 46,821 December 4,900 32,516 20,306 52,822

Quantity (short tons) 2016.-- January 15,895 62,741 19,969 82,710

February 14,019 61,212 6,354 67,566 March 10,073 42,088 18,748 60,836 April 24,258 74,849 31,475 106,323 May 16,726 27,661 12,267 39,928 June 22,940 41,993 20,722 62,715 July 11,087 25,125 32,020 57,145 August 4,534 24,131 38,075 62,206 September 1 17,097 16,258 33,355 October 15 42,866 7,885 50,751 November 10 50,806 7,403 58,209 December 10 50,272 12,543 62,815

2017.-- January 15,490 32,897 10,201 43,099

February 3,535 87,925 5,436 93,361 March 4,701 102,034 10,844 112,878 April --- 42,548 15,128 57,676 May 1,033 91,798 9,389 101,187 June 12,193 61,572 15,169 76,741 July 14,555 88,861 10,041 98,902 August --- 81,984 20,620 102,604 September 3,512 115,277 34,052 149,328 October --- 83,547 17,839 101,386 November 7,470 44,554 22,830 67,384 December --- 46,438 9,251 55,689

1 Turkey's reported subject imports ("Turkey, subject") exclude LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030. Imports from Turkey of LDWP between 16" and 24" O.D. under those excluded HTS numbers are reported, however, as part of the "nonsubject sources" and "all import sources" aggregates. Source: Official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000, accessed February 8, 2018

IV-11

Figure IV-4 LDWP: U.S. imports from month of entry and sources by source countries, January 2015 through December 2017

* * * * * * *

Figure IV-5 LDWP: Monthly U.S. imports by month of entry and sources for total subject and nonsubject countries, January 2015 through December 2017

* * * * * * *

Apparent U.S. consumption Table IV-8 and figure IV-5 present data on apparent U.S. consumption for LDWP. With

regards to quantity, apparent U.S. consumption decreased by *** percent from 2015 to 2016 and increased by *** percent from 2016 to 2017, for an overall decrease of *** percent from 2015 to 2017. With regards to value, apparent U.S. consumption decreased by *** percent from 2015 to 2017.

IV-12

Table IV-8 LDWP: Apparent U.S. consumption, 2015-17

Item Calendar year

2015 2016 2017 Quantity (short tons) U.S. producers' U.S. shipments 1,782,207 1,477,973 1,239,411 U.S. imports from.-- Canada 338,068 67,538 174,179



All import sources 1,346,666 744,559 1,060,234 Apparent U.S. consumption 3,128,873 2,222,532 2,299,645 Value (1,000 dollars) U.S. producers' U.S. shipments 1,960,885 1,485,645 1,269,803 U.S. imports from.-- Canada 413,100 65,257 180,546



All import sources 1,448,439 667,361 908,262 Apparent U.S. consumption 3,409,324 2,153,006 2,178,065 1 Turkey's reported subject imports ("Turkey, subject") exclude LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030. Imports from Turkey of LDWP between 16" and 24" O.D. under those excluded HTS numbers are reported, however, as part of the "nonsubject sources" and "all import sources" aggregates.

Source: Compiled from data submitted in response to Commission questionnaires and official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000 accessed February 8, 2018

IV-13

Figure IV-6 LDWP: Apparent U.S. consumption, 2015-17

Source: Official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000, accessed February 8, 2018

U.S. MARKET SHARES

U.S. market share data are presented in table IV-9. With regards to quantity, the share of U.S. producers’ U.S. shipments increased by *** percentage points from 2014 to 2016; the share of U.S. shipments of imports from China decreased by *** percentage points from 2014 to 2015 and increased by *** percentage points from 2015 to 2016; the share of U.S. shipments of imports from Vietnam increased by *** percentage points from 2014 to 2015 and *** from 2015 to 2016; the share of U.S. shipments of imports from the subject countries combined increased by *** percentage points from 2014 to 2016; the share of U.S. shipments of imports from nonsubject sources *** from 2014 to 2016.

IV-14

Table IV-9 LDWP: Market shares, 2015-17

Item Calendar year

2015 2016 2017 Quantity (short tons) Apparent U.S. consumption 3,128,873 2,222,532 2,299,645 Share of quantity (percent) U.S. producers' U.S. shipments 57.0 66.5 53.9 U.S. imports from.-- Canada 10.8 3.0 7.6



All import sources 43.0 33.5 46.1 Value (1,000 dollars) Apparent U.S. consumption 3,409,324 2,153,006 2,178,065 Share of value (percent) U.S. producers' U.S. shipments 57.5 69.0 58.3 U.S. imports from.-- Canada 12.1 3.0 8.3



All import sources 42.5 31.0 41.7 Note.--Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. 1 Turkey's reported subject imports ("Turkey, subject") exclude LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030. Imports from Turkey of LDWP between 16" and 24" O.D. under those excluded HTS numbers are reported, however, as part of the "nonsubject sources" and "all import sources" aggregates. Source: Compiled from data submitted in response to Commission questionnaires and official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000, accessed February 8, 2018

V‐1

PART V: PRICING DATA

FACTORS AFFECTING PRICES

Raw material costs

The primary raw material used in the production of LDWP differs according to the method of production. For ERW pipe, hot‐rolled steel coil is the principal raw material. For SAW pipe, the principal raw materials are cut‐to‐length plate (for LSAW) or hot‐rolled steel coil (for HSAW).1 Raw material costs, as a share of U.S. producers’ total cost of goods sold (COGS), fluctuated during the period but overall declined slightly from 77.8 percent in 2015 to 76.8 percent in 2016.

Prices for cut‐to‐length plate are typically higher than those for hot‐rolled coil. Throughout most of the period for which data were collected, prices for cut‐to‐length plate exceeded those for hot‐rolled coil. However, the price gap between the two raw material inputs began to narrow during the first quarter of 2016 and prices for cut‐to‐length plate were less than hot‐rolled coil during August‐December 2016. Prices for cut‐to‐length plate increased above those for hot‐rolled coil by January 2017 and remained above for the remainder of the period. The prices of hot‐rolled coil and cut‐to‐length plate fluctuated since 2015, decreasing during 2015 and first quarter 2016, increasing during the second and third quarters 2016, falling sharply during the fourth quarter of 2016, and then irregularly increasing through the fourth quarter of 2017. Seven of eleven U.S. producers reported that LDWP raw material prices have fluctuated since January 2015 and four U.S. producers stated that they have not been able to pass on raw material price increases to their customers. Figure V-1 Hot-rolled coil and cut-to-length plate: Average prices, monthly, January 2015 to December 2017

* * * * * * *

U.S. inland transportation costs

Nine of 11 U.S. producers and 9 of 19 importers reported that they typically arrange transportation to their customers. Most U.S. producers reported that their U.S. inland transportation costs ranged from 8 to 12 percent while most importers reported costs of 3 to 8 percent.

1 USITC, Investigation No. 731‐TA‐919 (Second Review): Certain Welded Large Diameter Line Pipe from Japan, PUB 4427, September 2013, V‐1.

V‐2

PRICING PRACTICES

Pricing methods

U.S. producers and importers set prices for LDWP primarily on transaction‐by‐transaction negotiations, although five U.S. producers and seven importers reported using contracts (table V‐1). LDWP is generally sold for specific projects through bidding competition. Table V-1 LDWP: U.S. producers’ and importers’ reported price setting methods, by number of responding firms1

Method U.S. producers Importers Transaction-by-transaction 9 19 Contract 5 7 Set price list 1 --- Other2 1 --- Responding firms 10 21

1 The sum of responses down may not add up to the total number of responding firms as each firm was instructed to check all applicable price setting methods employed. 2 U.S. producer *** reported that the market sets its prices. Source: Compiled from data submitted in response to Commission questionnaires.

U.S. producers reported selling most of their LDWP through either short‐term contracts

or in the spot market while importers reported selling most of their LDWP under short‐term and long‐term contracts. As shown in table V‐2, U.S. producers and importers reported their 2017 U.S. commercial shipments of LDWP by type of sale. Table V-2 LDWP: U.S. producers’ and importers’ shares of U.S. commercial shipments by type of sale, 2017

Type of sale U.S. producers Importers Long-term contracts 8.4 32.5 Annual contracts 9.9 --- Short-term contracts 44.3 60.4 Spot sales 37.3 7.0

Note.--Because of rounding, figures may not add to the totals shown. Source: Compiled from data submitted in response to Commission questionnaires.

Two U.S. producers reported that their long‐term contracts averaged 2 and 3 years and

four U.S. producers reported that the duration of their short‐term contracts ranged from 60 to 120 days. U.S. producers reported similar contract provisions for both long‐term and short‐term contracts. Most U.S. producers reported that their contracts did not allow for price renegotiations, fixed both price and quantity, and did not have meet‐or‐release provisions.

Most importers reported that their long‐term contract averaged 2 years and their short‐term contracts averaged 90 to 180 days. Importers also reported similar contract provisions for both long‐term and short‐term contracts. Most importers reported that that their contracts did

V‐3

not allow for price renegotiations, fixed both price and quantity, and did not have meet‐or‐release provisions.

Purchasers provided a general description of their firms’ method of purchase for LDWP. Nineteen of 22 purchasers reported using bids for at least some portion of their purchases of LDWP.2 Several purchasers reported that bid packages specify the quantity and technical specifications. Two purchasers noted that they do not disclose bids, quotes, and pricing to other suppliers. Two purchasers reported that they use one‐on‐one negotiations

Sales terms and discounts

Five of 11 U.S. producers and most importers (12 of 18) typically quote prices on an

f.o.b. basis. The majority of both U.S. producers and importers reported that they did not offer discounts. Most U.S. producers (9 of 11) and most importers (16 of 18) reported sales terms of net 30 days.

PRICE DATA

The Commission requested U.S. producers and importers to provide quarterly data for

the total quantity and f.o.b. value of the following LDWP products shipped to unrelated U.S. customers during January 2015‐December 2017.

Product 1.—Line pipe, 42” OD, 0.600”‐ 1.000” wall, API 5L X52‐X70, regardless of length. Product 2.—Line pipe, 32”‐ 36” OD, 0.350”‐ 0.800” wall, API 5L X52‐X70, regardless of length. Product 3.—Line pipe, 26”‐ 30” OD, 0.350”‐ 0.800” wall, API 5L X52‐X70, regardless of length. Product 4.—Structural pipe, 18”‐ 24” OD, 0.375”‐ 0.750” wall, ASTM A252, A1035, or similar, regardless of length. Product 5.—Structural pipe, >24”‐ 32” OD, 0.500”‐ 1.000” wall, ASTM A252, A1035, or similar, regardless of length. Product 6.—Line pipe, 20”‐ 24” OD, 0.300”‐ 0.500” wall, API 5L X60‐X70, regardless of length.

2 U.S. producers Berg Pipe, Dura‐Bond, Skyline, and Stupp stated that bidding process typically involves multiple rounds and purchasers do not share suppliers bid prices with other suppliers. Conference transcript, pp. 95‐97 (Riemer, Clark, Norris, and De Mey).

V‐4

Ten U.S. producers and nine importers provided usable pricing data for sales of the requested products, although not all firms reported pricing for all products for all quarters.3 4

Pricing data reported by these firms accounted for approximately 85.1 percent of U.S. producers’ shipments of product, 98.7 percent of U.S. shipments of subject imports from Canada, 68.5 percent of U.S. shipments of subject imports from China, 4.3 percent of U.S. shipments of subject imports from Greece, 45.2 percent of U.S. shipments of subject imports from India, 8.9 percent of U.S. shipments of subject imports from Korea, and 25.7 of U.S. shipments of subject imports from Turkey in 2017. Price data for products 1‐6 are presented in tables V‐3 to V‐8 and figures V‐2 to V‐7.5

Table V-3 LDWP: Weighted-average f.o.b. prices and quantities of domestic and imported product 1 and margins of underselling/(overselling), by quarters, January 2015-December 2017

* * * * * * * Table V-4 LDWP: Weighted-average f.o.b. prices and quantities of domestic and imported product 2 and margins of underselling/(overselling), by quarters, January 2015-December 2017


* * * * * * *

3 One importer (***) reported price data for imports from Canada, one importer (***) provided price data for imports from China, one importer (***) provided price data for imports from Greece, one importer (***) provided price data for imports from India, four importers (***) provided price data for imports from Korea, and one importer (***) provided price data for imports from Turkey.

4 Per‐unit pricing data are calculated from total quantity and total value data provided by U.S. producers and importers. The precision and variation of these figures may be affected by rounding, limited quantities, and producer or importer estimates.

5 Importer *** provided price data for LDWP from Korea ***. The unit values for some quarters were significantly higher than the average reported price. When contacted by staff, *** explained that the price included value‐added services (e.g. cutting and beveling of the pipe) in some quarters. Staff excluded two quarters of data reported for Product 1 (quarter 1, 2015 and quarter 2, 2016) and one quarter of data for Product 2 (quarter 1, 2015) which all had unit values above $***. ***. Email ***.

V‐5


Period

United States Canada China Price

(dollars per

short ton)


Price (dollars

per short ton)


Margin (percent)

Price (dollars

per short ton)


Margin (percent)

2015: Jan.-Mar. 961 12,076 --- *** --- *** *** ***

Apr.-Jun. 994 13,096 --- *** --- *** *** ***

Jul.-Sep. 918 12,868 --- *** --- *** *** ***

Oct.-Dec. 831 14,200 --- *** --- *** *** ***

2016: Jan.-Mar. 805 8,579 --- *** --- --- *** ---

Apr.-Jun. 664 17,447 --- *** --- --- *** ---

Jul.-Sep. 824 13,022 --- *** --- --- *** ---

Oct.-Dec. 846 10,819 --- *** --- --- *** ---

2017: Jan.-Mar. 833 8,940 --- *** --- *** *** ***

Apr.-Jun. 880 12,362 --- *** --- *** *** ***

Jul.-Sep. 926 20,699 --- *** --- *** *** ***

Oct.-Dec. 906 13,011 --- *** --- *** *** ***

Period

Greece IndiaPrice

(dollars per

short ton)


Margin (percent)

Price (dollars

per short ton)


Margin (percent)

2015: Jan.-Mar. --- *** --- --- *** ---

Apr.-Jun. --- *** --- --- *** ---

Jul.-Sep. --- *** --- --- *** ---

Oct.-Dec. --- *** --- --- *** ---

2016: Jan.-Mar. --- *** --- --- *** ---

Apr.-Jun. --- *** --- --- *** ---

Jul.-Sep. --- *** --- --- *** ---

Oct.-Dec. --- *** --- --- *** ---

2017: Jan.-Mar. --- *** --- --- *** ---

Apr.-Jun. --- *** --- --- *** ---

Jul.-Sep. --- *** --- --- *** ---

Oct.-Dec. --- *** --- --- *** --- Table continued on next page.

V‐6

Table V-6--Continued LDWP: Weighted-average f.o.b. prices and quantities of domestic and imported product 41 and margins of underselling/(overselling), by quarters, January 2015-December 2017

Period

United States Korea Turkey Price

(dollars per

short ton)


Price (dollars

per short ton)


Margin (percent)

Price (dollars

per short ton)


Margin (percent)

2015: Jan.-Mar. 961 12,076 --- *** --- --- *** ---

Apr.-Jun. 994 13,096 --- *** --- --- *** ---

Jul.-Sep. 918 12,868 --- *** --- --- *** ---

Oct.-Dec. 831 14,200 --- *** --- --- *** ---

2016: Jan.-Mar. 805 8,579 --- *** --- --- *** ---

Apr.-Jun. 664 17,447 --- *** --- --- *** ---

Jul.-Sep. 824 13,022 --- *** --- --- *** ---

Oct.-Dec. 846 10,819 --- *** --- --- *** ---

2017: Jan.-Mar. 833 8,940 --- *** --- --- *** ---

Apr.-Jun. 880 12,362 --- *** --- --- *** ---

Jul.-Sep. 926 20,699 --- *** --- --- *** ---

Oct.-Dec. 906 13,011 --- *** --- --- *** --- 1 Product 4: Structural pipe, 18”- 24” OD, 0.375”- 0.750” wall, ASTM A252, A1035, or similar, regardless of length. Source: Compiled from data submitted in response to Commission questionnaires.

V‐7



* * * * * * * Figure V-2 LDWP: Weighted-average prices and quantities of domestic and imported product 1, by quarters, January 2015-December 2017






* * * * * * *

V‐8

Price trends

In general, prices decreased during January 2015‐December 2017. Table V‐9 summarizes the price trends, by country and by product. Domestic price decreases ranged from 5.8 to 16.7 percent during 2015‐17 while import price decreases ranged from 0.3 to 21.0 percent. Table V-9 LDWP: Summary of weighted-average f.o.b. prices for products 1-6 from the United States and subject countries

Item Number of quarters

Low price (dollars

per short ton)

High price (dollars

per short ton)

Change in price over

period1 (percent)

Product 1: United States 12 *** *** ***

Canada 4 *** *** *** China --- --- --- --- Greece 2 *** *** *** India 6 *** *** *** Korea 8 *** *** *** Turkey --- --- --- ---


Canada 11 *** *** *** China --- --- --- --- Greece 3 *** *** *** India 1 *** *** *** Korea 12 *** *** *** Turkey --- --- --- ---


Canada 8 *** *** *** China --- --- --- --- Greece 4 *** *** *** India --- --- --- --- Korea 12 *** *** *** Turkey 1 *** *** ***


V‐9

Table V-9--Continued LDWP: Summary of weighted-average f.o.b. prices for products 1-6 from the United States and subject countries

Item Number of quarters

Low price (dollars

per short ton)

High price (dollars

per short ton)

Change in price over

period1 (percent)


Canada --- --- --- --- China 8 *** *** *** Greece --- --- --- --- India --- --- --- --- Korea --- --- --- --- Turkey --- --- --- ---


Canada --- --- --- --- China 4 *** *** *** Greece --- --- --- --- India --- --- --- --- Korea --- --- --- --- Turkey 2 *** *** ***


Canada 11 *** *** *** China 2 *** *** *** Greece 6 *** *** *** India --- --- --- --- Korea 4 *** *** *** Turkey --- --- --- ---

1 Percentage change from the first quarter in which data were available to the last quarter in which price data were available. Source: Compiled from data submitted in response to Commission questionnaires.

V‐10

Price comparisons

Price comparisons are presented by subject country (table V‐10) and by product (table V‐11).6 As shown in table V‐10, prices for LDWP imported from all subject countries combined were below those for U.S.‐produced product in 45 of 109 instances (*** short tons); margins of underselling ranged from 0.5 to 46.7 percent. In the remaining 64 instances (*** short tons), prices for LDWP imported from all subject countries combined were between 2.0 and 124.6 percent above prices for the domestic product. With the exception of Canada, the remaining five subject countries showed larger volumes of underselling than overselling. Volumes of underselling/overselling were split among price products. Product 1 (API line pipe with a diameter of 42 inches) and products 4 and 5 (structural pipe) showed larger volumes of underselling than overselling while products 2, 3, and 6 (all API line pipe products) showed larger volumes of overselling. Table V-10 LDWP: Instances of underselling/overselling and the range and average of margins, by country, January 2015-December 2017

Source

Underselling

Number of quarters


Average margin

(percent)

Margin Range (percent)

Min Max Canada 3 *** 29.1 22.9 37.7 China 14 *** 19.7 4.9 39.5 Greece 10 *** 11.1 0.5 23.5 India 6 *** 24.9 8.3 46.7 Korea 11 *** 11.5 0.8 35.9 Turkey 1 *** 36.9 36.9 36.9

Total, underselling 45 *** 17.5 0.5 46.7

Source

(Overselling)

Number of quarters


Average margin

(percent)


Min Max Canada 31 *** (24.2) (2.0) (77.6) China 0 *** --- --- --- Greece 5 *** (18.8) (3.9) (33.2) India 1 *** (15.2) (15.2) (15.2) Korea 25 *** (33.1) (2.2) (124.6) Turkey 2 *** (34.8) (2.0) (67.6)

Total, overselling 67 *** (27.4) (2.0) (124.6) Source: Compiled from data submitted in response to Commission questionnaires.

6 Petitioners and respondents Borusan and Welspun stated that the price data reflects shipments of LDWP with contract prices set at different dates. Borusan also contends that in addition to difference contract dates, the prices reflect different terms and conditions specific to the project in which the LDWP was sold. Petitioners’ postconference brief, p. 29; Borusan’s postconference brief, p. 21; Welspun’s postconference brief, p. 12. U.S. producers and importers reported that their contracts fixed price for the duration of the contract and did not allow for price renegotiation.

V‐11

Table V-11 LDWP: Instances of underselling/overselling and the range and average of margins, by product, January 2015-December 2017

Product

Underselling

Number of quarters


Average margin (percent)


Min Max Product 1 10 *** 22.5 5.8 46.7 Product 2 7 *** 9.7 0.5 21.7 Product 3 11 *** 15.0 1.1 36.9 Product 4 8 *** 12.6 4.9 20.5 Product 5 4 *** 27.7 21.0 39.5 Product 6 5 *** 23.7 7.5 36.8

Total, underselling 45 *** 17.5 0.5 46.7

Product

(Overselling)

Number of quarters


Average margin (percent)


Min Max Product 1 10 *** (40.0) (6.0) (85.4) Product 2 20 *** (29.3) (2.8) (77.6) Product 3 14 *** (14.5) (2.0) (39.0) Product 4 0 *** --- --- --- Product 5 2 *** (34.8) (2.0) (67.6) Product 6 18 *** (27.6) (7.1) (124.6)

Total, overselling 64 *** (27.4) (2.0) (124.6) Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUE

The Commission requested that U.S. producers of LDWP report purchasers where they

experienced instances of lost sales or revenue due to competition from imports of LDWP from Canada, China, Greece, India, Korea, or Turkey during January 2015‐December 2017. Nine U.S. producers reported that they had to reduce prices and four of seven responding U.S. producers reported that they had to roll back announced price increases. Nine U.S. producers reported that they had lost sales and submitted lost sales and lost revenue allegations. U.S. producers identified 63 firms where they lost sales or revenue (50 consisting lost sales allegations, 1 consisting of lost revenue allegations, and 26 consisting of both types of allegations).7 Twenty‐five allegations involved imports of LDWP from Canada; approximately 70 percent of these allegations involved LDWP with an overall diameter between 18 inches to 24 inches. Thirty‐one allegations involved LDWP from China; the pipe diameters involved in these allegations were evenly distributed between 18 inches to 48 inches. Twelve allegations involved LDWP from

7 Four U.S. producers reported 15 additional lost sales allegations that occurred prior to January 2015. These allegations were not included in the analysis.

V‐12

Greece; 75 percent of these allegations involved pipe diameters of 20 inches to 24 inches. Eight allegations involved LDWP from India; pipe diameters ranged from 12 inches to 48 inches. Eighteen allegations involved LDWP from Korea; almost all of these allegations involved pipe diameters ranging between 20 inches and 24 inches. Eleven allegations involved LDWP from Turkey; more than half of these allegations involved pipe diameters between 30 inches and 42 inches. Allegations occurred throughout 2015‐17, with the most number of allegations occurring in 2016.

Staff contacted 56 purchasers and received responses from 22 purchasers.8 Responding purchasers reported purchasing and importing 1.2 million short tons of LDWP in 2017 (table V‐12).9

8 Purchaser contact information was not provided for all 63 lost sale or lost revenue allegations. 9 Purchasing quantities fluctuated during 2015‐17 and decreased overall. Purchasers reported

purchasing and importing 1.4 million short tons in 2015 and 855,470 short tons in 2016.

V‐13

Table V-12 LDWP: Purchasers’ responses to purchasing patterns

Purchaser

Purchases and imports in 2017 (short tons)

Change in

domestic share2

(pp, 2015-17)

Change in

subject country share2

(pp, 2015-17) Domestic Subject All other1

*** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ***

Total 517,855 603,002 75,276 (19.0) 18.1 1 Includes all other sources and unknown sources. 2 Percentage points (pp) change: Change in the share of the firm’s total purchases of domestic and/or subject country imports between first and last years. Source: Compiled from data submitted in response to Commission questionnaires.

During 2017, responding purchasers purchased and/or imported 43.3 percent from U.S. producers, 23.3 percent from Canada, 0.5 percent from China, 7.8 percent from Greece, 16.0 percent from India, 2.4 percent from Korea, 0.5 percent from Turkey, 2.3 percent from nonsubject countries, and 4.0 percent from “unknown source” countries (table V‐13).

V‐14

Table V-13 LDWP: U.S. purchasers’ purchases and imports of LDWP, 2015-17

Item

Calendar year Comparison years 2015 2016 2017 2015-17 2015-16 2016-17

Quantity (short tons) Change in quantity (percent) Purchases and/or imports: United States *** *** *** *** *** ***

Canada *** *** *** *** *** *** China *** *** *** *** *** *** Greece *** *** *** *** *** *** India *** *** *** *** *** *** Korea *** *** *** *** *** *** Turkey *** *** *** *** *** ***

Subject sources *** *** *** *** *** *** All other sources *** *** *** *** *** ***

All known import sources *** *** *** *** *** ***

Unknown sources *** *** *** *** *** *** All sources *** *** *** (16.4) (40.2) 39.8

Item

Calendar year Comparison years 2015 2016 2017 2015-17 2015-16 2016-17

Share of quantity (percent) Change in share of quantity

(percentage point) Purchases and/or imports: United States 62.3 62.8 43.3 (19.0) 0.5 (19.5)

Canada 11.8 3.5 23.3 11.5 (8.3) 19.8 China 1.3 1.3 0.5 (0.8) (0.0) (0.8) Greece 2.8 8.3 7.8 4.9 5.5 (0.6) India 0.7 7.3 16.0 15.3 6.7 8.6 Korea 3.4 5.1 2.4 (1.0) 1.8 (2.8) Turkey 12.4 0.7 0.5 (11.9) (11.7) (0.2)

Subject sources 32.3 26.3 50.4 18.1 (6.1) 24.1 All other sources 1.6 8.0 2.3 0.7 6.3 (5.6)

All known import sources 34.0 34.2 52.7 18.8 0.3 18.5

Unknown sources 3.7 3.0 4.0 0.2 (0.8) 1.0 All sources 100.0 100.0 100.0 --- --- ---


V‐15

The majority of responding purchasers reported that their purchases from domestic producers fluctuated since January 2015 (table V‐14).10 Explanations for fluctuating purchases of domestic product included price, product specifications and engineering requirements, mill capacity, and schedule requirements. Purchaser *** stated that “Mill direct orders are competitively bid, and award decisions are based on various factors, such as cost, schedule, adherence to PAA specs, etc.” Explanations for increasing purchases of domestic product included faster delivery times and new or expanding business. Explanations for decreasing purchases of domestic product included quality issues and price. A plurality of purchasers reported that their purchases of LDWP from subject sources fluctuated since January 1, 2015. Explanations for fluctuating purchases of LDWP from subject countries included price fluctuations, lack of domestic capacity, and mill availability. Purchaser *** stated that it tried purchasing LDWP from China but because of quality issues, returned to purchasing LDWP from Korea. Purchaser *** stated that “U.S. distributors stock large quantities of Korean pipe resulting in higher availability of pipe physically located throughout the United States.” Several purchasers indicated that purchases are bid on by suppliers and product source fluctuates from project to project based on product specifications, price, and schedule/delivery times. Explanations for increasing purchases of LDWP from subject countries included lower prices, customer approval of product source, ability to meet schedule requirements, and project did not require domestic product. Explanations for decreasing purchases of LDWP from subject countries included purchasing imported product only in 2015, did not meet schedule requirements, and one‐off purchase due to shorter lead time. Table V-14 LDWP: Changes in purchasing patterns since January 1, 2015

Source Decreased Increased Constant Fluctuated Did not

purchase United States 2 2 1 10 4 Canada 0 4 1 5 8 China 1 3 0 4 11 Greece 2 2 0 4 10 India 1 0 0 1 15 Korea 4 1 1 7 4 Turkey 1 1 0 2 13 All other sources 2 1 0 6 9 Sources unknown 2 1 1 6 7


10 Of the 22 responding purchasers, 10 purchasers indicated that they did not know the source of a portion of the LDWP they purchased. Purchases of LDWP from unknown sources accounted for less than 5 percent of total reported purchases in a year.

V‐16

Of the 21 responding purchasers, 17 reported that, since 2015, they had purchased imported LDWP from subject countries instead of U.S.‐produced product.11 Fifteen of these purchasers reported that subject import prices were lower than U.S.‐produced product,12 and 13 of these purchasers reported that price was a primary reason for the decision to purchase imported product rather than U.S.‐produced product. Twelve purchasers estimated the quantity of LDWP from subject countries purchased instead of domestic product; quantities ranged from 385 short tons to 107,000 short tons (tables V‐15 and V‐16). Purchasers identified quality, availability, required product specifications, approved manufacturers list, project schedule, and extended payment terms as non‐price reasons for purchasing imported rather than U.S.‐produced product. Table V-15 LDWP: Purchasers’ responses to purchasing subject imports instead of domestic product

* * * * * * * Table V-16 LDWP: Purchasers’ responses to purchasing LDWP from subject countries instead of domestic

Source

Count of purchasers reporting subject

instead of domestic

Count of purchasers

reported that

imports were

priced lower

Count of purchasers reporting that price

was a primary

reason for shift

Quantity subject

purchased (short tons)

Other reasons for shift

Canada 9 5 4 *** 5 China 7 7 7 *** --- Greece 8 5 2 *** 6 India 2 1 1 *** 1 Korea 11 9 8 *** 3 Turkey 3 3 1 *** 3

All subject sources 17 15 13 *** 3 Source: Compiled from data submitted in response to Commission questionnaires.

11 Nine of 19 responding purchasers reported that they had purchased imported LDWP from Canada instead of U.S.‐produced product; 7 of 20 responding purchasers reported that they had purchased imported LDWP from China instead of U.S.‐produced product; 8 of 20 responding purchasers reported that they had purchased imported LDWP from Greece instead of U.S.‐produced product; 2 of 20 responding purchasers reported that they had purchased imported LDWP from India instead of U.S.‐produced product; 11 of 20 responding purchasers reported that they had purchased imported LDWP from Korea instead of U.S.‐produced product; and 3 of 19 responding purchasers reported that they had purchased imported LDWP from Turkey instead of U.S.‐produced product.

12 Half of responding purchasers reported that prices of LDWP from Canada (5 of 10 purchasers) and India (1 of 2 purchasers) were lower than U.S.‐produced product. Most purchasers reported that prices of LDWP from the other subject countries were lower than U.S.‐produced LDWP.

V‐17

Of the 22 responding purchasers, 3 reported that U.S. producers had reduced prices in order to compete with lower‐priced imports from Canada, Greece, and Korea (table V‐17; 14 reported that they did not know). The reported estimated price reduction ranged from 3.2 to 10 percent for imports from Canada, 10 percent for imports from Greece, and 10 percent for imports from Korea (table V‐18). Table V-17 LDWP: Purchasers’ responses to U.S. producer price reductions

* * * * * * * Table V-18 LDWP: Purchasers’ responses to U.S. producer price reductions, by country

Source

Count of purchasers

reporting U.S. producers reduced prices

Simple average of estimated U.S. price reduction (percent)

Range of estimated U.S. price reductions (percent)

Canada 2 *** 3.2 to 10.0 China --- --- --- Greece 2 *** 10.0 to 10.0 India --- --- --- Korea 2 *** 10.0 to 10.0 Turkey --- --- ---

All subject sources 3 *** 3.2 to 10.0 Source: Compiled from data submitted in response to Commission questionnaires.

VI‐1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

Eleven U.S. producers (***) provided financial data on their operations of LDWP.1 2 These data are believed to account for the vast majority of U.S. production of LDWP in 2017. No firms reported internal consumption or transfers to related firms. With respect to their U.S. operations, two producers *** reported purchasing inputs from related parties in 2017.3 4

*** both expanded their LDWP operations in 2015 and *** invested in new equipment to *** in 2016 and 2017. In addition, ten firms reported prolonged shutdowns and reductions in shifts at various times in 2016 and 2017.5 Stupp testified shutting down its HSAW mill indefinitely in December 2016 after partial idling of this plant in parts of 2016. In addition, Evraz idled its only U.S. LDWP facility (an HSAW mill) in Portland, Oregon in April 2016.6 In December 2016, Dura‐Bond purchased all of the pipe making assets, software, and spare parts of the former U.S. Steel’s idled McKeesport, Pennsylvania ERW mill that manufactured DLWP in 4‐20 inches.7 ***.8

1 As discussed in greater detail in Part I, ***. 2 Financial results were reported on the basis of generally accepted accounting principles (GAAP).

***. 3 ***. U.S. producers’ questionnaires, III‐6 to III‐8. Evraz testified that prior to idling in April 2016, its

Portland LDWP facility sourced inputs such as slab or hot‐rolled coil from related parties. Conference transcript, pp. 165‐167 (Kristofic).

4 The Commission’s current practice requires that relevant cost information associated with input purchases from related suppliers correspond to the manner in which this information is reported in the U.S. producer’s own accounting books and records.

5 Three of the largest producers *** reduced operations or partially idled their facilities from 2016 and 2017. Berg and Stupp testified to idling their mills for several months in 2016 and/or 2017, with reduced shifts when these mills restarted. ***. *** is the only LDWP producer that did not report prolonged shutdowns or reductions in shift. LDWP represented less than *** percent of ***’ production from 2015 to 2017 and *** percent of its shares of sales in 2017. Conference transcript, pp. 24‐26 (Reimer), p. 29 (Stupp); ***’s U.S. producer questionnaire, II‐2; and ***’s U.S. producer questionnaire, II‐2, II‐3a, and III‐5.

6 Evraz explained that “if demand would increase for new projects within reasonable geographic proximity of the mill, its {idled facility in Portland, Oregon} could be restarted.” Conference transcript, p. 129 (Fisher) and p. 165 (Kristofic); ***, email response to USITC auditor, February 8, 2018.

7 ***. The land and buildings of the McKeesport mill is owned by Regional Industrial Development Corp. (“RIDC”). RIDC is a not‐for‐profit, privately funded organization with the mission of “catalyz{ing} and support{ing} economic growth and high quality job creation through real estate development and finance of projects that advance the public interest.” RIDC stated that “it’s been redeveloping and remediating the National Tube site since 1990. U.S. Steel resumed operations there for three years, then announced in August 2014 it would idle the plant, citing the effect of imported products.” Dura‐Bond further explained that the ***. In addition, the ***. Dura‐Bond is ***. RIDC, Dura‐Bond, and TribLive websites, http://ridc.org/view‐property/mckeesport/, http://ridc.org/about/, https://www.dura‐

(continued...)

VI‐2

OPERATIONS ON LDWP

Table VI‐1 presents aggregated financial data on U.S. producers’ operations of LDWP, while table VI‐2 presents the corresponding changes in average unit values. Table VI‐3 presents selected company‐specific financial data. The reported aggregate net sales quantity declined by 32.6 percent from 2015 to 2017, while the aggregate net sales value declined by 38.7 percent during this time. Aggregated cost of goods sold (“COGS”) declined by 37.8 percent and selling, general, and administrative (“SG&A”) expenses declined by 37.7 percent from 2015 to 2017. As a result of larger declines in revenue compared to COGS and SG&A expenses, aggregated gross profit and operating income declined by 44.9 percent and 51.8 percent, respectively. For each year‐to‐year period, operating income fluctuated, decreasing by 80 percent from 2015 to 2016 but increasing by 139 percent from 2016 to 2017. Net income increased by 165 percent from 2015 to 2017. The increase in net income for the aggregated U.S. industry in 2017 reflects, in part, the data of ***, as well as a ***.

(…continued) bond.com/news/, and http://triblive.com/local/westmoreland/11767641‐74/bond‐company‐dura, retrieved February 17, 2017, conference transcript, pp. 31 and 34 (Norris); and *** to ***, email response to USITC auditor, February 21, 2018.

8 ***, email response to USITC auditor, February 5, 2018.

VI‐3

Table VI-1 LDWP: Results of operations of U.S. producers, 2015-17

Item Calendar year

2015 2016 2017 Quantity (short tons) Total net sales 1,845,710 1,473,332 1,243,614 Value (1,000 dollars) Total net sales 2,131,057 1,540,138 1,306,735 Cost of goods sold.-- Raw materials 1,449,053 1,099,161 889,338

Direct labor 185,165 149,474 121,230 Other factory costs 227,244 160,507 147,639

Total COGS 1,861,462 1,409,142 1,158,207 Gross profit 269,595 130,996 148,528 SG&A expense 131,620 103,179 82,039 Operating income or (loss) 137,975 27,817 66,489 Interest expense 20,040 23,733 18,583 All other expenses *** *** *** All other income *** *** *** Net income or (loss) *** *** *** Depreciation/amortization 49,453 49,466 45,758 Cash flow *** *** *** Ratio to net sales (percent) Cost of goods sold.-- Raw materials 68.0 71.4 68.1

Direct labor 8.7 9.7 9.3 Other factory costs 10.7 10.4 11.3

Average COGS 87.3 91.5 88.6 Gross profit 12.7 8.5 11.4 SG&A expense 6.2 6.7 6.3 Operating income or (loss) 6.5 1.8 5.1 Net income or (loss) *** *** *** Ratio to total COGS (percent) Cost of goods sold.-- Raw materials 77.8 78.0 76.8

Direct labor 9.9 10.6 10.5 Other factory costs 12.2 11.4 12.7

Average COGS 100.0 100.0 100.0 Table continued.

VI‐4

Table VI-1--Continued LDWP: Results of operations of U.S. producers, 2015-17

Item Calendar year

2015 2016 2017 Unit value (dollars per short ton)

Total net sales 1,155 1,045 1,051 Cost of goods sold.-- Raw materials 785 746 715

Direct labor 100 101 97 Other factory costs 123 109 119

Average COGS 1,009 956 931 Gross profit 146 89 119 SG&A expense 71 70 66 Operating income or (loss) 75 19 53 Net income or (loss) *** *** *** Number of firms reporting Operating losses 3 6 3 Net losses 4 7 5 Data 11 11 10

Note.--Data for 2017 excludes expenses reported by ***. ***, ***, email response to USITC auditor, February 8, 2018. Source: Compiled from data submitted in response to Commission questionnaires. Table VI-2 LDWP: Changes in AUVs, between calendar years

Item Between calendar years

2015-17 2015-16 2016-17 Change in AUVs (dollars per short ton)

Total net sales (104) (109) 5 Cost of goods sold.-- Raw materials (70) (39) (31)

Direct labor (3) 1 (4) Other factory costs (4) (14) 10

Average COGS (77) (52) (25) Gross profit (27) (57) 31 SG&A expense (5) (1) (4) Operating income or (loss) (21) (56) 35 Net income or (loss) *** *** ***


VI‐5

Table VI-3 LDWP: Selected results of operations of U.S. producers, by firm, 2015-17

Item Calendar year

2015 2016 2017 Total net sales quantity (short tons) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total net sales quantity 1,845,710 1,473,332 1,243,614 Total net sales value (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total net sales value 2,131,057 1,540,138 1,306,735 Cost of goods sold (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total COGS 1,861,462 1,409,142 1,158,207 SG&A expenses (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total SG&A expenses 131,620 103,179 82,039 Operating income or (loss) (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total operating income or (loss) 137,975 27,817 66,489 Table continued.

VI‐6

Table VI-3--Continued LDWP: Selected results of operations of U.S. producers, by firm, 2015-17

Item Calendar year

2015 2016 2017 Net income or (loss) (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total net income or (loss) *** *** *** COGS to net sales ratio (percent)

American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average COGS to net sales ratio 87.3 91.5 88.6 SG&A expense to net sales ratio (percent) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average SG&A expense to net sales ratio 6.2 6.7 6.3 Operating income or (loss) to net sales ratio (percent)

American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average operating income or (loss) to net sales ratio 6.5 1.8 5.1

Net income or (loss) to net sales ratio (percent) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average net income or (loss) to net sales ratio *** *** ***

Table continued.

VI‐7


Item Calendar year

2015 2016 2017 Unit net sales value (dollars per short ton) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average unit net sales value 1,155 1,045 1,051 Unit raw materials (dollars per short ton) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average unit raw materials 785 746 715 Unit COGS (dollars per short ton) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average unit COGS 1,009 956 931 Unit SG&A expenses (dollars per short ton) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average unit SG&A expense 71 70 66

Unit operating income or (loss)

(dollars per short ton) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average unit operating income or (loss) 75 19 53 Table continued.

VI‐8


Item Calendar year

2015 2016 2017 Unit net income or (loss) (dollars per short ton) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average unit net income or (loss) *** *** *** Note.--Data for 2017 excludes expenses for ***. ***, ***, email response to USITC auditor, February 8, 2018. Source: Compiled from data submitted in response to Commission questionnaires.

Net sales quantity and revenue

As presented in tables VI‐1 and VI‐3, net sales quantity and value declined each year from 2015 to 2017. In 2015 and 2016, *** was the industry leader in net sales quantity *** and value *** but in 2017, *** declined to the *** largest producer in terms of net sales. As reported earlier, *** experienced shutdowns and reduced sales throughout the period examined.9 In contrast, *** was the *** largest producer in terms of net sales of LDWP in 2015 but by 2017 had the highest net sales of *** and ***.10

On a per‐short ton basis, revenue decreased from $*** in 2015 to $*** in 2016 before increasing slightly to $*** in 2017. Seven firms reported declining per‐short ton net sales values from 2015 to 2017 while four firms *** reported increases in per‐short ton net sales values.

9 ***. ***’s U.S. producer questionnaire, II‐11. 10 ***. *** to ***, email response to USITC auditor, February 5, 2018.

VI‐9

COGS and expenses

As shown in table VI‐1, raw material costs represent the single largest component of total COGS, at 77.8 percent in 2015, 78.0 percent in 2016, and 76.8 percent in 2017. As shown in table VI‐3, average raw material costs, direct labor, and other factory costs varied from company to company.11 These cost differences may reflect underlying differences in input costs (ERW and HSAW use hot‐rolled steel coil and LSAW uses cut‐to‐length plate), OD, wall thickness, and length in the three manufacturing processes, as well as project‐based customer requirements. Aggregated for responding producers, raw material costs decreased from 2015 to 2017, in both absolute value and per‐short ton.12

Direct labor costs ranged from 9.9 percent to 10.6 percent of total COGS and decreased from 2015 to 2017 in both absolute value and on a per‐short ton basis.13 Similar to direct labor costs, other factory costs ranged from 11.4 percent to 12.7 percent of total COGS, and decreased in both absolute value and on a per‐short ton basis from 2015 to 2017. As a ratio to net sales, per‐short ton COGS increased from 87.3 percent in 2015, to 91.5 percent in 2016, then declined to 88.6 percent in 2017. As shown in tables VI‐1 and VI‐3, the industry’s SG&A expense ratios (i.e., total SG&A expenses divided by net sales) were fairly constant, ranging from 6.2 percent to 6.7 percent from 2015 to 2017.

In 2015 and 2016, three firms *** reported very large other expenses, resulting in a substantial decrease in other expenses from 2015 to 2017.14 In 2016, the majority of all other expenses *** were attributable to ***.15 Five firms, ***, reported all other income from 2015 to 2017, with *** accounting for the majority of the all other income ***.16 Overall, total other expenses (including interest expenses), decreased from 2015 to 2017 largely due to these non‐recurring expenses reported in 2015 and 2016.

11 *** reported the greatest decrease in per‐short ton raw material cost from 2015 to 2017, with unit raw materials decreasing by $*** per short‐ton. As previously noted, *** had a fixed cost contract for raw materials in 2017. *** reported the lowest per‐unit raw material costs of all eleven producers throughout the period examined. Laura El‐Sabaawi, Counsel to ***, email response to USITC auditor, February 5, 2018 and ***’s U.S. producer questionnaire, II‐3e‐ii, II‐9, and II‐10.

12 One firm, ***, reported non‐recurring charges in raw materials from inventory valuation using LCM (lower‐of‐cost‐or‐market) adjustments of $*** in 2015 and $*** in 2016. ***’s U.S. producer questionnaire, III‐10 and III‐11.

13 ***, reported non‐recurring charges of $*** in 2015 and $*** in 2016 that were included in labor costs and SG&A expenses. ***’s reported labor cost per‐short ton increasing by 63 percent from 2015 to 2016 due to shutdowns in both of its plants for parts of the year and retraining new and recalled employees. In 2017, ***. ***’s U.S. producer questionnaire, II‐11, III‐10, and III‐11.

14 *** reported non‐recurring charges that were included in all other expenses of $*** for impairment of goodwill, $*** for impairment of fixed assets, and $*** for pipe mill costs in 2015; $*** for pipe mill costs and $*** in 2016; and $*** for pipe mill costs and $*** for coating mill costs in 2017. ***’s U.S. producer questionnaire, III‐10 and III‐11.

15 *** reported non‐recurring charges that were included in all other expenses of $*** in 2016 and $*** in 2017 for asset impairment. ***’ U.S. producer questionnaire, III‐10 and III‐11.

16 ***’s U.S. producer questionnaire, III‐10 and III‐11.

VI‐10

Profitability

Table VI‐1 shows that producers’ aggregate gross profit declined from $269.6 million in 2015 to $131.0 million in 2016 before increasing to $148.5 million in 2017. Operating income decreased sharply from $138.0 million in 2015 to $27.8 million in 2016, and increased to $66.5 million in 2017. Aggregated for the industry, operating margins (i.e. operating income divided by net sales) fluctuated, from 6.5 percent in 2015, down to 1.8 percent in 2016, and then up to 5.1 percent in 2017. Net income *** from $*** in 2015 to a net loss of $*** in 2016, before *** in 2017. The net losses in 2016 is primarily explained by *** and ***. Combined, net profit margins for U.S. producers of LDWP were *** percent in 2015, decreased to a net loss of *** percent in 2016, and improving to a net profit of *** percent in 2017.

Table VI‐3 presents specific data on the top five U.S. producers. Individually, eight firms *** experienced operating losses in one or more years from 2015 to 2017. Out of all eleven U.S. producers *** reported the greatest improvements in operating profitability during the period examined, with operating margins of *** percent in 2015, *** percent in 2016, and *** percent in 2017. As noted earlier, *** explained its improved margins and net profits as the result of ***.17 ***’s operating margins consistently declined, from *** percent in 2015 to *** percent in 2016 and declined to *** percent in 2017. ***’s operating margin also consistently declined but to a greater degree, from *** percent in 2015 to *** percent in 2016, and a further decline to a negative margin of *** percent in 2017. Two firms, *** experienced fluctuating operating margins, with 2016 being the worst year for operating margins. Firm‐by‐firm analysis reveals that unit direct labor, unit other factory costs, and unit SG&A expenses varied substantially among firms due to different cost accounting systems and firm‐specific events, resulting in large fluctuations in per‐unit operating income/loss among firms.18 19

17 *** to ***, email response to USITC auditor, February 5, 2018. 18 Seven firms used standard cost accounting system while three firms *** used job order costing

system. One firm, ***, used a batch order costing to report manufacturing costs to products at a predetermined overhead rate and expends the unabsorbed manufacturing costs as period costs {typically manufacturing costs are recorded as product costs}. These variations in the firms’ accounting systems may contribute to the large variations in per‐short ton operating income/loss, ranging from a loss of $*** per‐short ton *** to an income of $*** per‐short ton ***. U.S. producer questionnaires, III‐3, III‐4, and III‐9a.

19 The discussion of COGS, gross profit, SG&A expenses, and operating income, as shown in tables VI‐1 and VI‐2, mirrors the results of a variance analysis in these investigations. That is, the decline in operating income from 2015 to 2017, reflects a larger decline in average revenue compared to average operating costs and expenses, and volume declined. Firms also reported a variety of production, processes, and fluctuating operating status over the period examined, which make a variance analysis less meaningful.

VI‐11

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Table VI‐4 presents capital expenditures and research and development (“R&D”) expenses. Aggregated capital expenditures declined sharply from 2015 to 2016 and declined again in 2017. From 2015 to 2016, three firms *** reported increases in capital expenditures, with ***. *** reported an increase in capital spending of almost $*** from 2015 to 2016 from the purchase of ***. *** also reported increases in capital spending from 2015 to 2016, explaining that its 2016 budgeted spending was $***. With the exception of ***, all producers reported declines in capital expenditures from 2015 to 2017; the vast majority of capital expenditure declines over the period is explained by *** which resulted in high capital spending in 2015.20 ***.21

Aggregated R&D increased slightly from 2015 to 2017, with 2016 showing the highest R&D expenditure. Firms reported R&D expenses related to development and testing of LDWP products.

Table VI-4 LDWP: U.S. producers’ capital expenditures and R&D expenses, by firm, 2015-17

Item

Calendar year 2015 2016 2017

Capital expenditures (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total capital expenditures 102,962 41,472 19,425 Research and development expenses (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total research and development expenses *** *** *** Source: Compiled from data submitted in response to Commission questionnaires.

20 ***. *** to ***, email response to USITC auditor, February 20, 2018. 21 ***. Dura‐Bond’s U.S. producer questionnaire, III‐15; *** to ***, email response to USITC auditor,

February 5, 2018; Petitioners’ postconference brief, pp. 43 and 65; *** to ***, email response to USITC auditor, February 21, 2018.

VI‐12

ASSETS AND RETURN ON ASSETS

Table VI‐5 presents data on the U.S. producers’ total assets and their return on assets (“ROA”). ROA is calculated as the ratio of operating income (or loss) to total assets. Aggregated for producers of LDWP, ROA declined overall from 2015 to 2017, but increased from 2016 to 2017, reflecting the same trend as operating income. From 2015 to 2017, *** was the only firm to report an increase in total net assets while *** reported the largest decrease in total net assets by value, or by $***. *** and *** had the highest percentage decrease in total assets *** and ***, respectively).22

Table VI-5 LDWP: U.S. producers’ total assets and return on assets, by firm, 2015-17

Firm Calendar year

2015 2016 2017 Total net assets (1,000 dollars) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Total net assets 1,885,731 1,452,951 1,249,613 Operating return on assets (percent) American *** *** *** Berg *** *** *** Dura-Bond *** *** *** Stupp *** *** *** Welspun *** *** *** All other firms *** *** ***

Average operating return on assets 7.3 1.9 5.3 Source: Compiled from data submitted in response to Commission questionnaires.

22 *** did not include ***. ***’s asset increase is a result of the ***. *** explained the decline in assets values was the result of decreasing inventories. *** asset values declined as a result of ***. ***’s U.S. producer questionnaires, III‐12 and *** to ***, email response to USITC auditor, February 21, 2018.

VI‐13

CAPITAL AND INVESTMENT

The Commission requested U.S. producers of LDWP to describe any actual or potential negative effects of imports of LDWP from Canada, China, Greece, India, Korea, and Turkey on their firms’ growth, investment, ability to raise capital, development and production efforts, or the scale of capital investments. Table VI‐6 tabulates the responses of the eleven responding U.S. producers and table VI‐7 presents the detailed narrative responses of U.S. producers regarding actual and anticipated negative effects of subject imports.23

Table VI-6 LDWP: Actual and anticipated negative effects of imports on investment and growth and development, since January 1, 2015

Item No Yes Negative effects on investment 1 7

Cancellation, postponement, or rejection of expansion projects

5 Denial or rejection of investment proposal 1 Reduction in the size of capital investments 5 Return on specific investments negatively impacted 6 Other negative effects on investments 4

Negative effects on growth and development 3 6 Rejection of bank loans

2 Lowering of credit rating 1 Problem related to the issue of stocks or bonds 0 Ability to service debt 3 Other impact on growth and development 4

Anticipated negative effects of imports 0 9 Source: Compiled from data submitted in response to Commission questionnaires. Table VI-7 LDWP: Narratives relating to actual and anticipated negative effects of imports on investment and growth and development, since January 1, 2015

* * * * *

23 *** did not provide responses on the negative effects of imports of LDWP. ***. ***’s U.S. producer questionnaire, III‐18.

VII-1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON NONSUBJECT COUNTRIES

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that—

In determining whether an industry in the United States is threatened with material injury by reason of imports (or sales for importation) of the subject merchandise, the Commission shall consider, among other relevant economic factors1-- (I) if a countervailable subsidy is involved, such information as may be

presented to it by the administering authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial increase in production capacity in the exporting country indicating the likelihood of substantially increased imports of the subject merchandise into the United States, taking into account the availability of other export markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise indicating the likelihood of substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices that are likely to have a significant depressing or suppressing effect on domestic prices, and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the foreign country, which can be used to produce the subject merchandise, are currently being used to produce other products,

1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider {these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension agreement is accepted under this title. The presence or absence of any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination may not be made on the basis of mere conjecture or supposition.”

VII-2

(VII) in any investigation under this title which involves imports of both a raw agricultural product (within the meaning of paragraph (4)(E)(iv)) and any product processed from such raw agricultural product, the likelihood that there will be increased imports, by reason of product shifting, if there is an affirmative determination by the Commission under section 705(b)(1) or 735(b)(1) with respect to either the raw agricultural product or the processed agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and

(IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report; information on the volume and pricing of imports of the subject merchandise is presented in Parts IV and V; and information on the effects of imports of the subject merchandise on U.S. producers’ existing development and production efforts is presented in Part VI. Information on inventories of the subject merchandise; foreign producers’ operations, including the potential for “product-shifting;” any other threat indicators, if applicable; and any dumping in third-country markets, follows. Also presented in this section of the report is information obtained for consideration by the Commission on nonsubject countries.

2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material injury to the domestic industry.”

VII-3

THE INDUSTRY IN CANADA

The Commission issued foreign producers’ or exporters’ questionnaires to six firms believed to produce and/or export LDWP from Canada.3 Usable response to the Commission’s questionnaire was received from one firm: Evraz. This firm’s exports to the United States accounted all or virtually all U.S. imports of LDWP from Canada in 2017. According to estimates requested of the responding Canadian producer, the production of LDWP in Canada reported in questionnaires accounts for approximately 15 percent of overall production of LDWP in Canada. Table VII- 1 presents information on Evraz’s LDWP operations.

Table VII-1 LDWP: Summary data for Canadian producer, 2017

* * * * * * *

Changes in operations

As presented in table VII-2, Evraz reported several operational and organizational changes since January 1, 2015.

Table VII-2 LDWP Canadian producer Evraz's reported changes in operations, since January 1, 2015

* * * * * * *

Operations on LDWP

Table VII-3 presents information on the LDWP operations of the responding Canadian producer Evraz. Reported capacity decreased by *** percent from 2015 to 2016, but increased by *** percent from 2016 to 2017, and projected increased by *** percent from 2017 to 2018, and by *** percent from 2018 to 2019. Reported production decreased by *** percent from 2015 to 2016, decreased by *** percent from 2016 to 2017, but is projected to increase by *** from 2017 to 2018 and by *** from 2018 to 2019. Capacity utilization decreased by *** percentage points from 2015 to 2017 but is projected to increase by *** percentage points from 2017 to 2019. Reported exports to the United States decreased by *** percent from 2015 to 2016, but increased by *** percent from 2016 to 2017, and are projected to increase by *** percent from 2016 to 2017 before decreasing by *** percent from 2017 to 2018. Exports to the United States as a share of total shipments ranged between *** and *** percent from 2015 to 2017, and are projected to increase by less than *** percentage point by 2018.

3 These firms were identified through a review of information submitted in the petition and contained in *** records.

VII-4

Table VII-3 LDWP: Data for Canadian producer Evraz, 2015 – 17 and projection calendar years 2018 - 19

* * * * * * *


Table VII-4 presents data on Canadian producer Evraz’s capacity and production of other products using the same equipment and machinery as LDWP. LDWP as a share of total production on this equipment and machinery ranged from *** percent to*** percent from 2015 to 2017.

Table VII-4 LDWP: Overall capacity and production on the same equipment as in-scope productions by Canadian producer Evraz, 2015-17

* * * * * * *

Exports

Table VII-5 presents GTA data for the leading export markets for LDWP from Canada. In 2016, United States, Mexico, and Australia, respectively were the top three export destination for LDWP from Canada. In 2016, exports to the United States accounted for 65.6 percent of all LDWP exports from Canada.

Table VII-5: LDWP: Exports from Canada, 2014-16

Destination market Calendar year

2014 2015 2016 Quantity (short tons) Canada exports to the United States 219,070 351,236 73,185 Canada exports to other major destination markets.-- Mexico 7 1,748 36,221

Australia --- 511 714 Burkina Faso 135 76 228 Chile 106 149 179 South Africa --- 305 174 Finland 1 --- 155 China 8 8 134 Morocco 56 151 122 All other destination markets 277 1,108 419

Total Canada exports 219,660 355,292 111,531 Table continued on the next page.

VII-5

Table VII-5:--Continued LDWP: Exports from Canada, 2014-16


2014 2015 2016 Value (1,000 dollars) Canada exports to the United States 298,556 423,552 69,797 Canada exports to other major destination markets.-- Mexico 9 2,119 37,708

Australia --- 601 803 Burkina Faso 181 90 263

Value (1,000 dollars) Chile 143 173 202 South Africa --- 351 193 Finland 1 --- 175 China 11 15 153 Morocco 76 181 138 All other destination markets 380 1,293 480

Total Canada exports 299,359 428,375 109,911 Unit value (dollars per short ton) Canada exports to the United States 1,363 1,206 954 Canada exports to other major destination markets.-- Mexico 1,370 1,212 1,041

Australia --- 1,176 1,124 Burkina Faso 1,342 1,191 1,149 Chile 1,342 1,161 1,131 South Africa --- 1,151 1,111 Finland 1,322 --- 1,130 China 1,359 1,815 1,142 Morocco 1,365 1,199 1,128 All other destination markets 1,375 1,167 1,147

Total Canada exports 1,363 1,206 985 Table continued on the next page.

VII-6

Table VII-5:--Continued LDWP: Exports from Canada, 2014-16


2014 2015 2016 Share of quantity (percent) Canada exports to the United States 99.7 98.9 65.6 Canada exports to other major destination markets.-- Mexico 0.0 0.5 32.5

Australia --- 0.1 0.6 Burkina Faso 0.1 0.0 0.2 Chile 0.0 0.0 0.2 South Africa --- 0.1 0.2 Finland 0.0 --- 0.1 China 0.0 0.0 0.1 Morocco 0.0 0.0 0.1 All other destination markets 0.1 0.3 0.4

Total Canada exports 100.0 100.0 100.0 Source: Official Canadian exports statistics under HS subheadings 730511, 730512,730519,730531, 730539 as reported by Statistics Canada in the IHS/GTA database, accessed Feburary 8, 2018.

THE INDUSTRY IN CHINA

The Commission issued foreign producers’ or exporters’ questionnaires to 156 firms believed to produce and/or export LDWP from China.4 None of these firms responded to the Commission’s questionnaire.

EXPORTS

Table VII-6 presents GTA data for the leading export markets for LDWP from China. In 2016, Egypt, Turkey, and Saudi Arabia, respectively were the top three export destination for LDWP from China. In 2016, exports to the United States accounted for 65.6 percent of all LDWP export from China.


VII-7

Table VII-6: LDWP: Exports from China 2014-16


2014 2015 2016 Quantity (short tons) China exports to the United States 56,823 64,225 38,375 China exports to other major destination markets.-- Egypt 1,474 12,819 268,032

Turkey 13,293 124,984 128,893 Saudi Arabia 83,216 54,279 111,491 Pakistan 11,997 133,096 77,101 Hong Kong 110,023 68,964 61,760 Canada 208,323 148,009 53,080 United Arab Emirates 29,256 51,458 42,366 Peru 13,528 122,256 37,442 All other destination markets 732,142 682,437 514,551

Total China exports 1,260,075 1,462,528 1,333,092 Value (1,000 dollars) China exports to the United States 39,029 42,295 22,876 China exports to other major destination markets.-- Egypt 1,081 6,715 101,242

Turkey 9,771 100,789 104,660 Saudi Arabia 63,706 30,693 65,051 Pakistan 9,335 81,643 49,672 Hong Kong 73,747 40,770 32,553 Canada 128,895 86,953 28,940 United Arab Emirates 19,344 30,211 21,092 Peru 9,399 100,127 30,206 All other destination markets 712,423 526,107 339,374

Total China exports 1,066,729 1,046,303 795,667 Unit value (dollars per short ton) China exports to the United States 687 659 596 China exports to other major destination markets.-- Egypt 733 524 378

Turkey 735 806 812 Saudi Arabia 766 565 583 Pakistan 778 613 644 Hong Kong 670 591 527 Canada 619 587 545 United Arab Emirates 661 587 498 Peru 695 819 807 All other destination markets 973 771 660

Total China exports 847 715 597 Table continued on the next page.

VII-8

Table VII-6: --Continued LDWP: Exports from China 2014-16


2014 2015 2016 Share of quantity (percent) China exports to the United States 4.5 4.4 2.9 China exports to other major destination markets.-- Egypt 0.1 0.9 20.1

Turkey 1.1 8.5 9.7 Saudi Arabia 6.6 3.7 8.4 Pakistan 1.0 9.1 5.8 Hong Kong 8.7 4.7 4.6 Canada 16.5 10.1 4.0 United Arab Emirates 2.3 3.5 3.2 Peru 1.1 8.4 2.8 All other destination markets 58.1 46.7 38.6

Total China exports 100.0 100.0 100.0 Note.--Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Source: Official China exports statistics under HS subheadings 730511, 730512,730519,730531, 730539 as reported by China Customs in the IHS/GTA database, accessed February 8, 2018

THE INDUSTRY IN GREECE

The Commission issued foreign producers’ or exporters’ questionnaires to one firm believed to produce and/or export LDWP from Greece.5 Usable responses to the Commission’s questionnaire were received from one firm: Corinth. This firm’s exports to the United States accounted for approximately 100 percent of U.S. imports of LDWP from Greece in 2017. According to estimates requested of the responding Greek producer, the production of LDWP in Greece reported in questionnaires accounts for approximately 100 percent of overall production of LDWP in Greece. Table VII-7 presents information on Corinth’s LDWP operations.

Table VII-7 LDWP: Summary data for Greek producer Corinth, 2017

* * * * * * *


As presented in table VII-8 the sole producer in Greece, Corinth reported one operational and organizational change since January 1, 2017.


VII-9

Table VII-8 LDWP: Greek producer Corinth’s reported changes in operations, since January 1, 2017

* * * * * * *

Operations on LDWP

Table VII-9 presents information on the LDWP operations of the responding Greek producer Corinth. Reported capacity remained constant, while production increased by *** percent from 2015 to 2017, and is projected to increase by *** from 2017 to 2019. Capacity utilization *** from 2015 to 2017 and is projected to increase by further from 2017 to 2019. Reported exports to the United States decreased by *** percent from 2015 to 2017, but will increase to *** short tons in 2018, before declining in 2019. Table VII-9 LDWP: Data for Greek producer Corinth, 2015-17 and projection calendars years 2018-19

* * * * * * *


As shown in table VII-10, the responding Greek firm produced other products on the same equipment and machinery used to produce LDWP. LDWP as a share of total production on this equipment and machinery ranged from *** percent to *** percent from 2015 to 2017.

Table VII-10 LDWP: Greece producer Corinth’s overall capacity and production on the same equipment as subject production, 2015-17

* * * * * * *

Exports

According to GTA, the leading export markets for LDWP from Greece are the United States, Poland, and the Netherlands, respectively in 2016 (table IV-11). During 2016, the United States was the top export market for LDWP from Greece, accounting for 61.6 percent, followed by the Netherlands, accounting for 21.8 percent.

VII-10

Table VII-11 LDWP: Exports from Greece, 2014-16


2014 2015 2016 Quantity (short tons) Greece exports to the United States 43,061 91,522 69,478 Greece exports to other major destination markets.-- Poland 130 475 24,576

Netherlands 8,020 5,209 5,488 United Kingdom 6,723 3,358 4,453 Italy 18,326 2,517 3,580 Mexico --- --- 1,961 France 18,639 160 1,153 Spain 74 104 436 Romania 253 324 398 All other destination markets 30,228 58,131 1,281

Total Greece exports 125,455 161,799 112,804 Value (1,000 dollars) Greece exports to the United States 41,761 89,788 54,224 Greece exports to other major destination markets.-- Poland 118 331 17,100

Netherlands 5,288 3,237 2,792 United Kingdom 5,798 2,773 3,395 Italy 17,237 1,723 2,902 Mexico --- --- 1,821 France 20,272 109 1,332 Spain 74 80 324 Romania 233 233 263 All other destination markets 30,180 53,109 938

Total Greece exports 120,962 151,383 85,091 Table continued on the next page.

VII-11

Table VII-11--Continued LDWP: Exports from Greece, 2014-16


2014 2015 2016 Unit value (dollars per short ton) Greece exports to the United States 970 981 780 Greece exports to other major destination markets.-- Poland 908 696 696

Netherlands 659 621 509 United Kingdom 862 826 762 Italy 941 684 811 Mexico --- --- 929 France 1,088 685 1,155 Spain 1,004 768 744 Romania 921 722 660 All other destination markets 998 914 732

Total Greece exports 964 936 754 Share of quantity (percent) Greece exports to the United States 34.3 56.6 61.6 Greece exports to other major destination markets.-- Poland 0.1 0.3 21.8

Netherlands 6.4 3.2 4.9 United Kingdom 5.4 2.1 3.9 Italy 14.6 1.6 3.2 Mexico --- --- 1.7 France 14.9 0.1 1.0 Spain 0.1 0.1 0.4 Romania 0.2 0.2 0.4 All other destination markets 24.1 35.9 1.1

Total Greece exports 100.0 100.0 100.0 Source: GTIS/GTA database.

VII-12

THE INDUSTRY IN INDIA

The Commission issued foreign producers’ or exporters’ questionnaires to 26 firms believed to produce and/or export LDWP from India.6 Usable responses to the Commission’s questionnaire were received from one firm: Welspun. This firm did not provide an estimate of its exports to the United States or estimates of its production of LDWP in India. Table VII-11 presents information on the LDWP operations of the responding producer and exporter in India.

Table VII-11 LDWP: Summary data for Indian producer Welspun, 2017

* * * * * * *


The responding Indian producer of LDWP, Welspun, did not report any operational and organizational changes since January 1, 2017.

Operations on LDWP

Table VII-12 presents information on the LDWP operations of the responding Indian producer Welpun. Reported capacity remained constant, while production increased by *** percent from 2015 to 2017, but is projected to decrease by *** from 2017 to 2019. Capacity utilization increased to *** percent in 2017 but is projected to be lower in 2018 and 2019. Reported exports to the United States increased by nearly *** between 2015 and 2017. Table VII-12 LDWP: Data for Indian producer Welspun, 2015-17 and projection calendar years 2018-19

* * * * * * *


As shown in table VII-13, the responding Indian firm did not produce other products on the same equipment and machinery used to produce LDWP.


VII-13

Table VII-13 LDWP: Indian producer Welspun’s overall capacity and production on the same equipment as subject production, 2015-17

* * * * * * *

Exports

According to GTA, the leading export markets for LDWP from India are the United Arab Emirates, Oman, and the United States, respectively (table VII-14). During 2016 the United Arab Emirates was the largest export market for LDWP from India, accounting for 24.1 percent followed by Oman, accounting for 18.9 percent. During 2016, the United States was the third largest export market for LDWP from India, accounting for 10.4 percent, followed by Kuwait, accounting for 10.1 percent. Table VII-14: LDWP: Exports from India, 2014-16


2014 2015 2016 Quantity (short tons) Exports from India to the United States 114,607 19,937 78,054 Exports from India to other major destination markets.-- United Arab Emirates 34,290 71,146 181,327

Oman 1,462 5,084 142,235 Kuwait 288 1,038 76,270 Bangladesh 4 28,814 16,580 Canada 486 0 10,204 Nepal 609 409 3,000 Iraq 27,801 234,770 1,633 United Kingdom 332 --- 1,294 All other destination markets 477,191 279,267 242,998

Total Exports from India 657,070 640,464 753,594 Value (1,000 dollars) Exports from India to the United States 96,153 19,159 53,584 Exports from India to other major destination markets.-- United Arab Emirates 30,181 60,283 136,769

Oman 1,096 4,335 113,259 Kuwait 447 873 50,176 Bangladesh 50 25,142 9,037 Canada 272 0 9,938 Nepal 450 139 1,028 Iraq 35,190 278,205 1,901 United Kingdom 411 --- 991 All other destination markets 470,068 271,834 151,379

Total Exports from India 634,320 659,970 528,062 Table continued on next page.

VII-14

Table VII-14--Continued LDWP: Exports from India, 2014-16


2014 2015 2016 Unit value (dollars per short ton) India exports to the United States 839 961 686 India exports to other major destination markets.-- United Arab Emirates 880 847 754

Oman 750 853 796 Kuwait 1,550 841 658 Bangladesh 11,941 873 545 Canada 560 1,633 974 Nepal 739 341 343 Iraq 1,266 1,185 1,165 United Kingdom 1,237 --- 766 All other destination markets 985 973 623

Total India exports 965 1,030 701 Share of quantity (percent) India exports to the United States 17.4 3.1 10.4 India exports to other major destination markets.-- United Arab Emirates 5.2 11.1 24.1

Oman 0.2 0.8 18.9 Kuwait 0.0 0.2 10.1 Bangladesh 0.0 4.5 2.2 Canada 0.1 0.0 1.4 Nepal 0.1 0.1 0.4 Iraq 4.2 36.7 0.2 United Kingdom 0.1 --- 0.2 All other destination markets 72.6 43.6 32.2

Total India exports 100.0 100.0 100.0 Source: GTIS/GTA database.

VII-15

THE INDUSTRY IN KOREA

The Commission issued foreign producers’ or exporters’ questionnaires to 28 firms believed to produce and/or export LDWP from Korea.7 Usable responses to the Commission’s questionnaire were received from one firm: EEW Korea Co., Ltd. This firm’s exports to the United States accounted for approximately *** percent of U.S. imports of LDWP from Korea in 2017. According to estimates requested of the responding Korean producer, the production of LDWP in Korea reported in questionnaires accounts for approximately *** percent of overall production of LDWP in Korea. Table VII- 15 presents information on the LDWP operations of the responding producers and exporters in Korea.

Table VII-15 LDWP: Summary data for Korean producer EEW, 2017

* * * * * * *


The responding Korean producer of LDWP did not report any operational and organizational changes since January 1, 2017.

Operations on LDWP

Table VII-16 presents information on the LDWP operations of the responding Korean producer EEW. Reported capacity remained constant, while production increased by *** percent from 2015 to 2017, but is projected to decrease by *** from 2017 to 2019. Capacity utilization increased *** from 2015 to 2017 but is projected to decrease to *** percent from in 2018 and 2019. Reported exports to the United States fluctuated from 2015 to 2017 and are projected to decrease by *** percent from 2017 to 2019. Table VII-16 LDWP: Data for Korean producer EEW, 2015 - 17 and projection calendar years 2018 - 19

* * * * * * *


As shown in table VII-17, the responding Korean producer EEW produced other products on the same equipment and machinery used to produce LDWP.


VII-16

Table VII-17 LDWP: Korean producer EEW’s overall capacity and production on the same equipment as subject production, 2015-17

* * * * * * *

Exports

According to GTA, the leading export markets for LDWP from Korea are the United States, Singapore, and Mexico, respectively (table VII-18). During 2016, the United States was the top export market for LDWP from Korea, accounting for 29.4 percent, followed by Singapore, accounting for 7.9 percent. Table IV-18 LDWP: Exports from Korea, 2014-16


2014 2015 2016 Quantity (short tons) Korea exports to the United States 248,492 224,347 155,961 Korea exports to other major destination markets.-- Singapore 23,997 15,150 41,776

Mexico 10,035 25,384 32,986 Malaysia 24,174 21,874 29,522 Kuwait 1,336 11,799 27,926 United Arab Emirates 65,492 63,024 27,455 Russia 8,309 22,041 25,498 Saudi Arabia 17,566 17,245 21,852 China 26,083 11,466 17,239 All other destination markets 254,219 256,152 149,897

Total Korea exports 679,703 668,481 530,113 Value (1,000 dollars) Korea exports to the United States 203,062 150,757 110,957 Korea exports to other major destination markets.-- Singapore 20,275 15,149 23,527


Total Korea exports 658,662 569,074 399,572 Table continued on next page.

VII-17

Table IV-18:--Continued LDWP: Exports from Korea, 2014-16


2014 2015 2016 Unit value (dollars per short ton) Korea exports to the United States 817 672 711 Korea exports to other major destination markets.-- Singapore 845 1,000 563

Mexico 1,263 988 706 Malaysia 1,030 1,015 725 Kuwait 1,725 922 779 United Arab Emirates 1,048 939 820 Russia 1,040 801 727 Saudi Arabia 1,283 1,179 917 China 1,032 993 697 All other destination markets 1,057 923 837

Total Korea exports 969 851 754 Share of quantity (percent) Korea exports to the United States 36.6 33.6 29.4 Korea exports to other major destination markets.-- Singapore 3.5 2.3 7.9

Mexico 1.5 3.8 6.2 Malaysia 3.6 3.3 5.6 Kuwait 0.2 1.8 5.3 United Arab Emirates 9.6 9.4 5.2 Russia 1.2 3.3 4.8 Saudi Arabia 2.6 2.6 4.1 China 3.8 1.7 3.3 All other destination markets 37.4 38.3 28.3

Total Korea exports 100.0 100.0 100.0 Source: GTIS/GTA database.

VII-18

THE INDUSTRY IN TURKEY

The Commission issued foreign producers’ or exporters’ questionnaires to 12 firms believed to produce and/or export LDWP from Turkey.8 Usable responses to the Commission’s questionnaire were received from six firms: Borusan Mannesmann Boru Sanayi ve Ticaret Anonim Sirketi , HDM Celik Boru Sanayi Ve Ticaret A.S., Erciyas Celik Boru Sanayi A.S., Mazlum Mangtay, Ozbal Celik Boru San Tic Ve Taaah A.S, and Umran Celik Boru Sanayii A.S. These firms’ exports to the United States accounted for virtually all of U.S. imports of LDWP from Turkey in 2017. According to estimates requested of the responding Turkish producers, the production of LDWP in Turkey reported in questionnaires accounts for virtually all percent of overall production of LDWP in Turkey. Table VII-19 presents information on the LDWP operations of the responding producers and exporters in Turkey.

Table VII-19 LDWP: Summary data for producers in Turkey, 2017

* * * * * * *


As presented in table VII-20, producers in Turkey reported several operational and organizational changes since January 1, 2015.

Table VII-20 LDWP: Turkish producers' reported changes in operations, since January 1, 2015

* * * * * * *

Operations on LDWP

Table VII-21 presents information on the LDWP operations of the responding producers and exporters in Turkey. Capacity remained relatively stable between 2015 and 2017, while production and capacity utilization dropped *** in 2017. These trends are projected to reverse in 2018 and 2019. Exports to the United States likewise dropped *** in 2017, and are projected to fluctuate in 2018 and 2019. Table VII-21 LDWP: Data for producers in Turkey, 2015-17 and projection calendar years 2018 - 19

* * * * * * *


VII-19


As shown in table VII-22, responding Turkish firms produced other products on the same equipment and machinery used to produce LDWP. Table VII-22 LDWP: Turkish producers' overall capacity and production on the same equipment as subject production, 2015-17

* * * * * * *

Exports

According to GTA, the top three leading export markets for LDWP from Turkey are United States, Singapore, and Mexico (table IV-23). During 2016, the United States was the top export market for LDWP from Turkey, accounting for 29 percent, followed by the Singapore, accounting for 7.9 percent. Table IV-23 LDWP: Exports from Turkey, 2014-16


2014 2015 2016 Quantity (short tons) Exports from Turkey to the United States 248,492 224,347 155,961 Exports from Turkey to other major destination markets.-- Singapore 23,997 15,150 41,776


Total Exports from Turkey 679,703 668,481 530,113 Table continued on the next page.

VII-20

Table IV-23--Continued LDWP: Exports from Turkey, 2014-16


2014 2015 2016 Value (1,000 dollars) Exports from Turkey to the United States 203,062 150,757 110,957 Exports from Turkey to other major destination markets.-- Singapore 20,275 15,149 23,527


Total Exports from Turkey 658,662 569,074 399,572 Unit value (dollars per short ton) Exports from Turkey to the United States 817 672 711 Exports from Turkey to other major destination markets.-- Singapore 845 1,000 563

Mexico 1,263 988 706 Malaysia 1,030 1,015 725 Kuwait 1,725 922 779 United Arab Emirates 1,048 939 820 Russia 1,040 801 727 Saudi Arabia 1,283 1,179 917 China 1,032 993 697 All other destination markets 1,057 923 837

Total Turkey exports 969 851 754 Table continued on the next page.

VII-21

Table IV-23--Continued LDWP: Exports from Turkey, 2014-16


2014 2015 2016 Share of quantity (percent) Exports from Turkey to the United States 36.6 33.6 29.4 Exports from Turkey to other major destination markets.-- Singapore 3.5 2.3 7.9

Mexico 1.5 3.8 6.2 Malaysia 3.6 3.3 5.6 Kuwait 0.2 1.8 5.3 United Arab Emirates 9.6 9.4 5.2 Russia 1.2 3.3 4.8 Saudi Arabia 2.6 2.6 4.1 China 3.8 1.7 3.3 All other destination markets 37.4 38.3 28.3

Total Exports from Turkey 100.0 100.0 100.0 Source: GTIS/GTA database.

U.S. INVENTORIES OF IMPORTED MERCHANDISE

Table VII-24 presents data on U.S. importers’ reported inventories of LDWP.

Table VII-24 LWDP: U.S. importers’ inventories, 2015-17

* * * * * * *

SUBJECT COUNTRIES COMBINED

Table VII-25 present information on LDWP operation of the reporting producers and exporters in the subject countries and table VII-26 presents data on overall capacity and production for responding firms from subject countries.

Table VII-25 LWDP: Data on industry in subject countries, 2015-17 and projection calendar years 2018 and 2019

* * * * * * *

Table VII-26 LWDP: Data on industry in subject countries, 2015-17 and projection calendar years 2018 and 2019

* * * * * * *

VII-22

U.S. IMPORTERS’ OUTSTANDING ORDERS

The Commission requested importers to indicate whether they imported or arranged for the importation of LDWP from all subject countries after December 2017. Table

Table VII-27 LWDP: Arranged imports, January 2018 through December 2018

* * * * * * *

INFORMATION ON NONSUBJECT COUNTRIES

Welded pipe is produced in substantial quantities by pipe and tube producers throughout the world. The World Steel Association publishes data on the broader product grouping of all welded tubes. From 2011 to 2015, global welded tube production increased by 30.1 percent. In 2015, global welded tube production reached 110 million short tons. Most of the growth in welded tube production is attributable to China, which accounted for 70.1 percent of all global welded tube production in 2015.9 According to Table VII-27, the five largest global exporters of welded tube products by quantity in 2016 were: Germany, Indian, Japan, South Korea, and Russia. Table VII-28 Large diameter welded pipe: Global exports by exporter 2014-16

Exporter Calendar year

2014 2015 2016 Quantity (short tons) United States 249,499 105,090 53,513 Canada 219,660 355,292 111,531 China 1,260,075 1,462,528 1,333,092 Greece 125,455 161,799 112,804 India 657,070 640,464 753,594 South Korea 679,703 668,481 530,113 Turkey 157,902 213,986 220,772

Subject sources 3,099,865 3,502,549 3,061,906

All other major reporting exporters.-- Germany 578,409 768,633 955,636 Japan 1,201,763 578,742 703,448 Russia 521,729 241,778 393,857 United Arab Emirates 1,337,932 279,242 354,059 Netherlands 135,356 250,061 251,118

All other exporters 2,107,681 2,215,280 899,370 Total global exports 9,232,235 7,941,376 6,672,907


9 World Steel Association, Steel Statistical Yearbook, November 2017, table 28. p. 52.

VII-23

Table VII-28-- Continued Large diameter welded pipe: Global exports by exporter 2014-16


2014 2015 2016 Value (1,000 dollars) United States 447,375 209,411 92,059 Canada 299,359 428,375 109,911 China 1,066,729 1,046,303 795,667 Greece 120,962 151,383 85,091 India 634,320 659,970 528,062 South Korea 658,662 569,074 399,572 Turkey 133,978 186,787 177,103

Subject sources 2,914,011 3,041,893 2,095,405 All other major reporting exporters.-- Germany 845,213 1,426,214 1,145,906 Japan 1,319,865 746,085 487,119 Russia 609,985 201,511 328,011 United Arab Emirates 201,908 330,593 365,146 Netherlands 233,868 321,750 452,310

All other exporters 2,378,713 2,980,963 1,155,743 Total global exports 8,950,939 9,258,420 6,121,700

Unit value (dollars per short ton) United States 1,793 1,993 1,720 Canada 1,363 1,206 985 China 847 715 597 Greece 964 936 754 India 965 1,030 701 South Korea 969 851 754 Turkey 848 873 802

Subject sources 940 868 684 All other major reporting exporters.-- Germany 1,461 1,856 1,199 Japan 1,098 1,289 692 Russia 1,169 833 833 United Arab Emirates 151 1,184 1,031 Netherlands 1,728 1,287 1,801

All other exporters 1,129 1,346 1,285 Total global exports 970 1,166 917


VII-24

Table VII-28-- Continued Large diameter welded pipe: Global exports by exporter 2014-16


2014 2015 2016 Share of quantity (percent)

United States 2.7 1.3 0.8 Canada 2.4 4.5 1.7 China 13.6 18.4 20.0 Greece 1.4 2.0 1.7 India 7.1 8.1 11.3 South Korea 7.4 8.4 7.9 Turkey 1.7 2.7 3.3

Subject sources 33.6 44.1 45.9 All other major reporting exporters.-- Germany 6.3 9.7 14.3 Japan 13.0 7.3 10.5 Russia 5.7 3.0 5.9 United Arab Emirates 14.5 3.5 5.3 Netherlands 1.5 3.1 3.8

All other exporters 22.8 27.9 13.5 Total global exports 100.0 100.0 100.0

Note.--Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent.

Source: Official exports statistics under HS subheadings 730511, 730512,730519,730531, 730539 in the IHS/GTA database, accessed February 8 2018.

A-1

APPENDIX A

FEDERAL REGISTER NOTICES

A-3

The Commission makes available notices relevant to its investigations and reviews on its website, www.usitc.gov. In addition, the following tabulation presents, in chronological order, Federal Register notices issued by the Commission and Commerce during the current proceeding.

Citation Title Link 83 FR 15 01/23/2018

Large Diameter Welded Pipe From

India, the People’s Republic of China,

the Republic of Korea, and the

Republic of Turkey: Institution of Antidumping and Countervailing Investigations and Scheduling of Preliminary Phase Investigations

https://www.gpo.gov/fdsys/pkg/FR-2018-01-23/pdf/2018-01157.pdf

83 FR 7154 02/20/2018




Republic of Turkey: Initiation of

Countervailing Duty Investigations


83 FR 7148 02/20/2018




Republic of Turkey: Initiation of

Countervailing Duty Investigations


http://www.usitc.gov/







B-1

APPENDIX B

LIST OF STAFF CONFERENCE WITNESSES

B-3

CALENDAR OF PUBLIC PRELIMINARY CONFERENCE

Those listed below appear as witnesses at the United States International Trade Commission’s preliminary conference:

Subject: Large Diameter Welded Pipe from Canada, China, Greece, India, Korea, and Turkey

Inv. Nos.: 701-TA-593-596 and 731-TA-1401-1406 (Preliminary)

Date and Time: February 7, 2018 - 11:30 a.m.

Sessions were held in connection with these preliminary phase investigations in the Main Hearing Room (Room 101), 500 E Street, SW., Washington, DC.

OPENING REMARKS:

In Support of Imposition (Laura El-Sabaawi, Wiley Rein LLP) In Opposition to Imposition (Frank Morgan, Trade Law Defense LLC)

In Support of the Imposition of Antidumping and Countervailing Duty Orders:

Wiley Rein LLP Washington, DC on behalf of

Petitioners

Jason Norris, President, Dura-Bond Industries

John P. Stupp, Jr., President and Chief Executive Officer, Stupp Bros.; and Chief Executive Officer, Stupp Corporation

John Clark, Chief Commercial Officer, Stupp Corporation

Robert Griggs, President and Chief Executive Officer, Trinity Products

Laurent De Mey, President, Skyline Steel

Michael Chefren, Vice President of Operations, Skyline Steel

B-4

In Support of the Imposition of Antidumping and Countervailing Duty Orders (continued):

Ingo Riemer, President and Chief Executive Officer, Berg Steel Pipe Corp.

Jonathan Kirkland, Vice President, Sales and Logistics, Berg Steel Pipe Corp.

Wesley Hendricks, Director of Operations, Pipe Division, JSW Steel (USA) Inc.

Burton Bluestone, President, Greens Bayou Pipe Mill, LP

Robert Y. Kopf, General Manager, Business Support, United States Steel Corporation

Dr. Seth Kaplan, Senior Economic Advisor, Capital Trade, Inc.

Andrew Szamosszegi, Principal, Capital Trade, Inc.

Timothy C. Brightbill ) Tessa V. Capeloto ) – OF COUNSEL Laura El-Sabaawi )

In Opposition to the Imposition of Antidumping and Countervailing Duty Orders:

Vorys, Sater, Seymour and Pease LLP Washington, DC on behalf of

Corinth Pipeworks Pipe Industry S.A. CPW America Co.

(collectively “CPW”)

Apostolos Papavasileiou, Chief Executive Officer, Corinth Pipeworks Pipe Industry S.A.

Alexandra Tzanetopulou, Legal Advisor, Corinth Pipeworks Pipe Industry S.A.

Dianne Burger, President, CPW America Co.

Frederick P. Waite ) ) – OF COUNSEL

Kimberly R. Young )

B-5

In Opposition to the Imposition of Antidumping and Countervailing Duty Orders (continued):

Trade Law Defense LLC Alexandria, VA on behald of

Welspun Corp Limited Welspun Tradings Ltd. Welspun Global Trade LLC Welspun Tubular LLC

Russell Fisher, Senior Vice President of Sales and Marketing, Welspun Global Trade LLC

Frank Morgan ) – OF COUNSEL Arent Fox LLP Washington, DC on behalf of

The Turkish Steel Exporters Association and its members

Andrew Jaxa-Debicki ) – OF COUNSEL

Cassidy Levy Kent (USA) LLP Adduci, Mastriani & Schaumberg Washington, DC on behalf of

EVRAZ NA

Brian Kristofic, Director of Trade and Government Affairs, EVRAZ NA

Alan Harapiak, Vice President of Operations for the Tubular Division, EVRAZ NA

James R. Cannon ) Christopher Cochlin ) – OF COUNSEL Deanna Tanner Okun )

REBUTTAL/CLOSING REMARKS:)

In Support of Imposition (Timothy C. Brightbill, Wiley Rein LLP) In Opposition to Imposition (Frank Morgan, Trade Law Defense LLC;

and Frederick P. Waite, Vorys Sater, Seymour and Pease LLP)

C-1

APPENDIX C

SUMMARY DATA

Table C-1LDWP: Summary data concerning the U.S. market, 2015-17

2015 2016 2017 2015-17 2015-16 2016-17U.S. consumption quantity:

Amount.................................................................................... 3,128,873 2,222,532 2,299,645 (26.5) (29.0) 3.5Producers' share (fn1)............................................................. 57.0 66.5 53.9 (3.1) 9.5 (12.6)Importers' share (fn1):

Canada................................................................................. 10.8 3.0 7.6 (3.2) (7.8) 4.5China.................................................................................... 1.7 0.9 1.5 (0.2) (0.7) 0.6Greece.................................................................................. 6.4 4.1 0.6 (5.8) (2.3) (3.5)India...................................................................................... 1.6 1.5 17.1 15.4 (0.2) 15.6Korea.................................................................................... 8.0 8.5 8.8 0.8 0.5 0.3Turkey, subject..................................................................... 4.1 5.4 2.7 (1.3) 1.3 (2.7)

Subject sources................................................................. 32.6 23.4 38.2 5.6 (9.2) 14.8Subject sources less Greece............................................. 26.2 19.3 37.6 11.5 (6.8) 18.3Nonsubject sources........................................................... 10.4 10.1 7.9 (2.6) (0.4) (2.2)Nonsubject sources plus Greece....................................... 16.9 14.2 8.5 (8.4) (2.7) (5.7)

All import sources........................................................... 43.0 33.5 46.1 3.1 (9.5) 12.6

U.S. consumption value:Amount.................................................................................... 3,409,324 2,153,006 2,178,065 (36.1) (36.8) 1.2Producers' share (fn1)............................................................. 57.5 69.0 58.3 0.8 11.5 (10.7)Importers' share (fn1):

Canada................................................................................. 12.1 3.0 8.3 (3.8) (9.1) 5.3China.................................................................................... 1.2 0.6 1.4 0.2 (0.5) 0.7Greece.................................................................................. 6.1 3.4 0.5 (5.6) (2.7) (2.9)India...................................................................................... 1.5 1.2 13.6 12.0 (0.3) 12.3Korea.................................................................................... 5.9 6.8 7.4 1.4 0.8 0.6Turkey, subject..................................................................... 4.6 6.1 2.8 (1.8) 1.5 (3.2)

Subject sources................................................................. 31.5 21.2 33.9 2.4 (10.3) 12.7Subject sources less Greece............................................. 25.3 17.8 33.4 8.0 (7.6) 15.6Nonsubject sources........................................................... 11.0 9.8 7.8 (3.2) (1.2) (2.0)Nonsubject sources plus Greece....................................... 17.1 13.2 8.3 (8.8) (3.9) (4.9)

All import sources........................................................... 42.5 31.0 41.7 (0.8) (11.5) 10.7

U.S. imports from:Canada:

Quantity................................................................................ 338,068 67,538 174,179 (48.5) (80.0) 157.9Value.................................................................................... 413,100 65,257 180,546 (56.3) (84.2) 176.7Unit value.............................................................................. $1,222 $966 $1,037 (15.2) (20.9) 7.3Ending inventory quantity..................................................... *** *** *** *** *** ***

China:Quantity................................................................................ 52,301 20,890 34,938 (33.2) (60.1) 67.3Value.................................................................................... 40,494 13,799 29,447 (27.3) (65.9) 113.4Unit value.............................................................................. $774 $661 $843 8.9 (14.7) 27.6Ending inventory quantity..................................................... *** *** *** *** *** ***

Greece:Quantity................................................................................ 201,344 90,802 13,854 (93.1) (54.9) (84.7)Value.................................................................................... 208,570 74,072 11,420 (94.5) (64.5) (84.6)Unit value.............................................................................. $1,036 $816 $824 (20.4) (21.3) 1.0Ending inventory quantity..................................................... *** *** *** *** *** ***

India:Quantity................................................................................ 51,083 32,719 392,096 667.6 (35.9) 1,098.4Value.................................................................................... 52,059 26,689 295,315 467.3 (48.7) 1,006.5Unit value.............................................................................. $1,019 $816 $753 (26.1) (20.0) (7.7)Ending inventory quantity..................................................... *** *** *** *** *** ***

Korea:Quantity................................................................................ 250,799 189,322 201,875 (19.5) (24.5) 6.6Value.................................................................................... 202,781 146,173 160,567 (20.8) (27.9) 9.8Unit value.............................................................................. $809 $772 $795 (1.6) (4.5) 3.0Ending inventory quantity..................................................... *** *** *** *** *** ***

Turkey, subject:Quantity................................................................................ 127,166 119,568 62,490 (50.9) (6.0) (47.7)Value.................................................................................... 155,681 130,439 61,235 (60.7) (16.2) (53.1)Unit value.............................................................................. $1,224 $1,091 $980 (20.0) (10.9) (10.2)Ending inventory quantity..................................................... *** *** *** *** *** ***

Subject sources:Quantity................................................................................ 1,020,762 520,840 879,433 (13.8) (49.0) 68.8Value.................................................................................... 1,072,684 456,429 738,529 (31.2) (57.4) 61.8Unit value.............................................................................. $1,051 $876 $840 (20.1) (16.6) (4.2)Ending inventory quantity..................................................... *** *** *** *** *** ***

Table continued on next page..

Period changes

(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)

Calendar year Calendar yearReported data

C-3

Table C-1--ContinuedLDWP: Summary data concerning the U.S. market, 2015-17

2015 2016 2017 2015-17 2015-16 2016-17Subject sources less Greece:

Quantity................................................................................ 819,417 430,038 865,579 5.6 (47.5) 101.3Value.................................................................................... 864,114 382,357 727,109 (15.9) (55.8) 90.2Unit value.............................................................................. $1,055 $889 $840 (20.3) (15.7) (5.5)Ending inventory quantity..................................................... *** *** *** *** *** ***

Nonsubject sources:Quantity................................................................................ 325,904 223,719 180,801 (44.5) (31.4) (19.2)Value.................................................................................... 375,755 210,932 169,733 (54.8) (43.9) (19.5)Unit value.............................................................................. $1,153 $943 $939 (18.6) (18.2) (0.4)Ending inventory quantity..................................................... *** *** *** *** *** ***

Nonsubject sources plus Greece:Quantity................................................................................ 527,249 314,521 194,655 (63.1) (40.3) (38.1)Value.................................................................................... 584,325 285,004 181,153 (69.0) (51.2) (36.4)Unit value.............................................................................. $1,108 $906 $931 (16.0) (18.2) 2.7Ending inventory quantity..................................................... *** *** *** *** *** ***

All import sources:Quantity................................................................................ 1,346,666 744,559 1,060,234 (21.3) (44.7) 42.4Value.................................................................................... 1,448,439 667,361 908,262 (37.3) (53.9) 36.1Unit value.............................................................................. $1,076 $896 $857 (20.4) (16.7) (4.4)Ending inventory quantity..................................................... *** *** *** *** *** ***

U.S. producers':Average capacity quantity....................................................... 3,808,024 3,900,575 3,760,155 (1.3) 2.4 (3.6)Production quantity.................................................................. 1,952,563 1,393,262 1,220,125 (37.5) (28.6) (12.4)Capacity utilization (fn1).......................................................... 51.3 35.7 32.4 (18.8) (15.6) (3.3)U.S. shipments:

Quantity................................................................................ 1,782,207 1,477,973 1,239,411 (30.5) (17.1) (16.1)Value.................................................................................... 1,960,885 1,485,645 1,269,803 (35.2) (24.2) (14.5)Unit value.............................................................................. $1,100 $1,005 $1,025 (6.9) (8.6) 1.9

Export shipments:Quantity................................................................................ *** *** *** *** *** ***Value.................................................................................... *** *** *** *** *** ***Unit value.............................................................................. *** *** *** *** *** ***

Ending inventory quantity........................................................ 262,489 176,042 137,593 (47.6) (32.9) (21.8)Inventories/total shipments (fn1).............................................. *** *** *** *** *** ***Production workers.................................................................. 2,938 2,310 2,049 (30.3) (21.4) (11.3)Hours worked (1,000s)............................................................ 6,293 4,680 4,020 (36.1) (25.6) (14.1)Wages paid ($1,000)............................................................... 181,694 136,501 118,071 (35.0) (24.9) (13.5)Hourly wages (dollars per hour).............................................. $28.87 $29.17 $29.37 1.7 1.0 0.7Productivity (short tons per 1,000 hour)................................... 310.3 297.7 303.5 (2.2) (4.1) 2.0Unit labor costs........................................................................ $93.05 $97.97 $96.77 4.0 5.3 (1.2)Net sales:

Quantity................................................................................ 1,845,710 1,473,332 1,243,614 (32.6) (20.2) (15.6)Value.................................................................................... 2,131,057 1,540,138 1,306,735 (38.7) (27.7) (15.2)Unit value.............................................................................. $1,155 $1,045 $1,051 (9.0) (9.5) 0.5

Cost of goods sold (COGS)..................................................... 1,861,462 1,409,142 1,158,207 (37.8) (24.3) (17.8)Gross profit or (loss)................................................................ 269,595 130,996 148,528 (44.9) (51.4) 13.4SG&A expenses...................................................................... 131,620 103,179 82,039 (37.7) (21.6) (20.5)Operating income or (loss)...................................................... 137,975 27,817 66,489 (51.8) (79.8) 139.0Net income or (loss)................................................................ *** *** *** *** *** ***Capital expenditures................................................................ 102,962 41,472 19,425 (81.1) (59.7) (53.2)Unit COGS............................................................................... $1,009 $956 $931 (7.7) (5.2) (2.6)Unit SG&A expenses............................................................... $71 $70 $66 (7.5) (1.8) (5.8)Unit operating income or (loss)................................................ $75 $19 $53 (28.5) (74.7) 183.2Unit net income or (loss).......................................................... *** *** *** *** *** ***COGS/sales (fn1).................................................................... 87.3 91.5 88.6 1.3 4.1 (2.9)Operating income or (loss)/sales (fn1).................................... 6.5 1.8 5.1 (1.4) (4.7) 3.3Net income or (loss)/sales (fn1)............................................... *** *** *** *** *** ***

Notes:

fn1.--Reported data are in percent and period changes are in percentage points.fn2.--Undefined.

Calendar year

Note--Turkey's reported subject imports ("Turkey, subject") excludes LDWP from 16" to 24" in outside diameter (O.D.) reported under HTS statistical reporting numbers 7305.11.1030, 7305.12.1030, and 7305.19.1030. Imports from Turkey of LDWP between 16" and 24" O.D. under those excluded HTS numbers are reported, however, as part of the "nonsubject sources" and "all import sources" aggregates.

Calendar year

C-4

Source: Compiled from data submitted in response to Commission questionnaires and official U.S. import statistics using HTS statistical reporting numbers 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 7305.19.5000, 7305.31.4000, 7305.31.6090, 7305.39.1000, and 7305.39.5000 accessed February 8, 2018

(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)

Reported data Period changes

D-1

APPENDIX D

SHIPMENTS OF LDWP BY GRADE, SIZE AND METHOD OF MANUFACTURE

D-3

Table D-1 LDWP: U.S. producers’ U.S. shipments and U.S. importers’ U.S. imports by grade, 2015-17

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E-1

APPENDIX E

LINE PIPE AND STRUCTURAL PIPE

E-3

Table E-1 API and other line pipe: Select data on industry, 2015-17

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E-4

Table E-2 ASTM and other non-line pipe: Select data on industry, 2015-17

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Documents

Large Diameter Welded Pipe from Canada, China, Greece ...usitc.gov/publications/701_731/pub4768.pdf · Part II: Conditions of competition in the U.S. market ... Greece of LDWP that